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Under Ind AS 115, the OUTPUT METHOD of measuring progress on a performance obligation satisfied over time recognises revenue on the basis of:
AA discount-cash-flow valuation of the remaining PO
BStraight-line allocation over the contractual period regardless of actual performance
CDirect measurement of the value of goods/services transferred to date relative to the remaining promised goods/services
DThe entity's efforts or inputs (labour hours, costs incurred) toward satisfying the PO
Answer & Solution
Correct answer: C. Direct measurement of the value of goods/services transferred to date relative to the remaining promised goods/services
Output methods (surveys of work completed, milestones, units delivered, time elapsed) measure progress by the value delivered to the customer. Input methods measure progress by the entity's effort/cost — a different family. Straight-line and DCF are not standard methods of measuring progress under Ind AS 115.
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