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

Under the Appendix 1 comparison of Ind AS 115 with IFRS 15, what change was made to paragraph 51 regarding variable consideration, and how are penalties dealt with?

Ind AS 115 amends paragraph 51 to exclude penalties from the examples of variable consideration, which IFRS 15 includes. It then inserts paragraph 51AA to explain the accounting treatment of penalties. Penalties are therefore not simply listed as a cause of variable consideration.

  1. APenalties were added as an extra example in paragraph 51 and paragraph 51AA was deleted
  2. BPenalties were removed from the examples of variable consideration in paragraph 51, and paragraph 51AA was inserted to explain their accounting treatmentCorrect
  3. CParagraph 51 was deleted entirely and replaced by paragraph 109AA
  4. DPenalties are retained in paragraph 51 exactly as in IFRS 15 and no new paragraph was inserted

Explanation

IFRS 15 paragraph 51 lists penalties among the reasons consideration can vary. Ind AS 115 amended paragraph 51 to exclude penalties from that list and inserted paragraph 51AA to explain how penalties are accounted for. The other options misstate this change or confuse it with paragraph 109AA on excise duty.

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