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CMA Final · Corporate Financial Reporting · Revenue from Contracts with Customers (Ind AS 115)

Under Ind AS 115 as notified in India, which of the following is the treatment of penalties in relation to the transaction price, as compared with IFRS 15?

Ind AS 115 removes penalties from the examples of variable consideration listed in paragraph 51, unlike IFRS 15. It inserts paragraph 51AA to explain how penalties are to be accounted for, so the Indian standard differs from the international one on this point.

  1. APenalties remain in the list of examples in paragraph 51 of Ind AS 115 that cause consideration to vary, exactly as in IFRS 15
  2. BPenalties are excluded from the examples in paragraph 51 of Ind AS 115, and paragraph 51AA is inserted to explain their accounting treatmentCorrect
  3. CPenalties are not covered anywhere in Ind AS 115 and are left to Ind AS 37
  4. DPenalties are deleted along with paragraph B57 and the numbering is retained

Explanation

The comparison with IFRS 15 notes that paragraph 51 of Ind AS 115 has been amended to exclude 'penalties' from the list of examples of variable consideration. Paragraph 51AA was inserted to explain the accounting for penalties. The first option describes IFRS 15, not Ind AS 115. The deletion of B57 is unrelated to penalties.

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