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Under Ind AS 115, an entity that has both an unconditional right to consideration (receivable) AND an outstanding performance obligation on the same contract must present:
ANeither, until either the cash is collected or the PO is satisfied
BOnly the receivable, with the contract liability netted
CBoth — a receivable for the unconditional right (under Ind AS 109) and a contract liability/contract asset for the relationship between performance and the customer's payment status
DOnly the contract asset/liability — the receivable is subsumed
Answer & Solution
Correct answer: C. Both — a receivable for the unconditional right (under Ind AS 109) and a contract liability/contract asset for the relationship between performance and the customer's payment status
Para 105-108 — an entity presents a RECEIVABLE for any unconditional right (governed by Ind AS 109). The contract asset/liability presentation reflects the relationship between performance and customer payment AT THE REPORTING DATE. Both can coexist: e.g., entity has invoiced for delivered services (receivable) AND received an advance for future services (contract liability). They are not netted as a default.
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