Accounting · Ind AS 115 Revenue Recognition Principles
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Under the framework of Ind AS 115, revenue from a contract that includes both a software license and a subsequent annual maintenance service must be split and recognized at different points in time. Reason R: The five-step revenue recognition model requires the identification of distinct performance obligations within a contract and the allocation of the transaction price to each as they are satisfied. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct and R is the correct explanation of A✓
- 2Both A and R are correct but R is NOT the correct explanation of A
- 3A is correct but R is not correct
- 4A is not correct but R is correct
Correct answer
Both A and R are correct and R is the correct explanation of A
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