Ind AS 115
Active
Revenue from Contracts with Customers
Establishes a five-step model for recognising revenue from contracts with customers, substantially converged with IFRS 15, with disclosure relaxations for unlisted Indian companies.
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Conceptual Framework Linkage
Identical control-based recognition philosophy to IFRS 15
Ind AS 115 applies the IDENTICAL core principle as IFRS 15 – revenue is recognised to depict the transfer of promised goods/services to customers in an amount reflecting the CONSIDERATION the entity expects to be entitled to, replacing the old risks-and-rewards-based approach with a CONTROL-based five-step model.
HOW IND AS 115 MAPS TO THE FRAMEWORK
Faithful representation – depicting the genuine pattern of value transfer to customers – identical to IFRS 15 Comparability – a single revenue model replacing the numerous prior industry-specific standards (construction contracts, real estate guidance) – identical to IFRS 15 Cost constraint for smaller Indian entities – India provides certain DISCLOSURE-LEVEL relaxations for companies whose debt/equity instruments are NOT listed, reducing the burden of some of Ind AS 115's more extensive disaggregated revenue disclosures for this population – a genuinely distinctive Indian cost-benefit calibration
Ind AS 115's RECOGNITION AND MEASUREMENT principles carry over from IFRS 15 without substantive modification – the meaningful Indian difference sits entirely in the DISCLOSURE layer for certain unlisted entities (Section 7).
The five-step model – identical to IFRS 15
StepAction
1Identify the contract with a customer
2Identify the performance obligations
3Determine the transaction price
4Allocate the transaction price
5Recognise revenue as/when obligations are satisfied
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Scope & Applicability
What Ind AS 115 covers
Ind AS 115 applies to ALL contracts with customers except leases, insurance contracts, financial instruments, and certain non-monetary exchanges – IDENTICAL scope to IFRS 15.
Ind AS 115 REPLACED the earlier Ind AS 11 (Construction Contracts) and Ind AS 18 (Revenue), identical in effect to how IFRS 15 replaced IAS 11 and IAS 18 globally.
Key definitions you must know
Performance obligation
IDENTICAL definition to IFRS 15 – a promise to transfer a distinct good or service.
Unlisted company (Ind AS context)
A company whose debt/equity securities are NOT listed on a recognised stock exchange, eligible for certain Ind AS 115 disclosure relaxations.
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The Five-Step Model
Identical to IFRS 15
The five-step model applies IDENTICALLY to Indian entities – from contract identification through the final revenue recognition trigger – with no Indian-specific step modification.
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Identifying Performance Obligations
Identical distinctness criteria to IFRS 15
Example 1: An Indian software company's bundled contract
An Indian SaaS company sells a bundled contract for software licence access (₹6,00,000) plus one year of implementation support (₹1,50,000) and ongoing maintenance (₹2,50,000), each capable of being sold separately and used independently by the customer.
EACH component is DISTINCT and represents a SEPARATE performance obligation, requiring the ₹10,00,000 total transaction price to be ALLOCATED across all three based on standalone selling prices – an IDENTICAL analysis to how IFRS 15 would treat the same bundled software contract globally.
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Determining & Allocating Transaction Price
Identical to IFRS 15
Variable consideration, significant financing components, non-cash consideration, and consideration payable to customers – all IDENTICAL to IFRS 15, allocated based on RELATIVE standalone selling prices.
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Recognising Revenue – Point in Time vs Over Time
Identical three-criteria over-time test to IFRS 15
The over-time recognition criteria (customer simultaneously receives/consumes benefits; entity's performance creates/enhances a customer-controlled asset; or the asset has no alternative use PLUS an enforceable right to payment) are IDENTICAL to IFRS 15 – relevant for Indian real estate and EPC/construction sector revenue recognition, replacing the old Ind AS 11 percentage-of-completion method with this new control-based framework.
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Disclosure Relaxations for Unlisted Indian Companies
The genuinely important Indian divergence point
Ind AS 115 provides RELIEF from certain extensive disclosure requirements (e.g. some disaggregated revenue disclosures, remaining performance obligation disclosures) for companies whose debt/equity instruments are NOT listed on a stock exchange – a COST-BENEFIT calibration NOT present in IFRS 15 for a comparably-sized global entity population, which generally applies its disclosure requirements more uniformly regardless of listing status.
Example 2: Disclosure burden for a listed vs unlisted Indian company
An Indian LISTED manufacturing company and an otherwise-comparable UNLISTED Indian manufacturing company both apply Ind AS 115's five-step recognition model identically to their sales contracts.
The LISTED company must provide the FULL suite of Ind AS 115 disclosures (disaggregated revenue, contract balances, remaining performance obligations). The UNLISTED company may be ELIGIBLE for certain disclosure relaxations under the applicable Ind AS rules – while its underlying REVENUE RECOGNITION accounting remains IDENTICAL to the listed company's and to IFRS 15's own model.
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Contract Costs
Identical to IFRS 15
Incremental costs of obtaining a contract, and costs to fulfil a contract, are capitalised and amortised on a systematic basis consistent with the transfer of goods/services – IDENTICAL to IFRS 15.
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Disclosure Requirements
Identical core requirements to IFRS 15 (subject to Section 7 relaxations)
Disaggregation of revenue Contract balances (receivables, contract assets/liabilities) Remaining performance obligations Significant judgements
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Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
Identifying distinct performance obligations in bundled Indian contracts Over-time vs point-in-time recognition for construction/real estate contracts Whether the entity qualifies for unlisted-company disclosure relaxations
SIGNIFICANT ESTIMATES
Variable consideration estimates (rebates, volume discounts common in Indian FMCG/retail contracts) Standalone selling price allocation
Indian real estate companies faced a SIGNIFICANT transition impact moving from the old percentage-of-completion Ind AS 11/18 approach to Ind AS 115's stricter control-based over-time criteria, often shifting recognition patterns materially.
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Ind AS 115 vs IFRS 15 – Full Comparison
Comprehensive comparison table
FeatureIFRS 15Ind AS 115
Five-step recognition modelStandard modelIDENTICAL – no substantive divergence
Disclosure requirementsBroadly uniform regardless of listing statusRELAXED for companies whose debt/equity are not listed – a genuinely Indian cost-benefit calibration
Predecessor standards replacedIAS 11, IAS 18Ind AS 11, Ind AS 18 – IDENTICAL transition effect
Ind AS 115's RECOGNITION AND MEASUREMENT model is essentially IDENTICAL to IFRS 15 – the meaningful Indian divergence is confined to DISCLOSURE relief for unlisted entities, not the underlying accounting.
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Statement Mapping
Comprehensive event-to-statement mapping table
Event / transactionStatement(s) affectedNotes
Revenue recognised as performance obligations satisfiedP&LIdentical to IFRS 15
Contract asset/liability recognitionBalance SheetIdentical to IFRS 15
Capitalised contract costsBalance SheetAmortised to P&L over the contract period
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Related Standards
Cross-reference map
StandardConnection
IFRS 15The global counterpart standard, near-identically converged
Ind AS 11 / 18 (withdrawn)Predecessor standards replaced by Ind AS 115
Ind AS 116Leases are scoped OUT of Ind AS 115
Quick-reference glossary
Contract asset
An entity's right to consideration for goods/services already transferred, conditional on something other than the passage of time – identical to IFRS 15.
Standalone selling price
The price at which an entity would sell a good/service separately to a customer – identical concept to IFRS 15.
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Glossary
Performance obligation
A promise to transfer a distinct good or service to a customer – IDENTICAL definition to IFRS 15.
Contract asset
An entity's right to consideration for goods/services already transferred, conditional on something other than the passage of time – identical to IFRS 15.
Contract liability
An entity's obligation to transfer goods/services to a customer for which the customer has already paid – identical to IFRS 15.
Standalone selling price
The price at which an entity would sell a good/service separately to a customer – identical concept to IFRS 15.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows