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Under Ind AS 101, the difference between MANDATORY EXCEPTIONS and OPTIONAL EXEMPTIONS is:
ABoth are voluntary — entities can choose to apply either or neither
BMandatory exceptions apply only to first-time adopters with foreign operations; optional exemptions apply only to listed entities
CMandatory exceptions PROHIBIT retrospective application in certain areas; optional exemptions are voluntary reliefs from full retrospective application in specified areas
DBoth are mandatory — Ind AS 101 prescribes them all without entity discretion
Answer & Solution
Correct answer: C. Mandatory exceptions PROHIBIT retrospective application in certain areas; optional exemptions are voluntary reliefs from full retrospective application in specified areas
Para 13-17 — mandatory exceptions (in Appendix B) prohibit retrospective application — typically where hindsight bias would distort the picture (estimates, derecognition of financial assets/liabilities, hedge accounting, NCI). Optional exemptions (in Appendix C/D) are voluntary reliefs where cost would exceed benefit — entities elect to use them or not, on a per-area basis. Both modify the general retrospective principle.
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