Neelanchal has a 10-year gas-purchase contract with Uttaranchal, advance paid for all 10 years at forecasted prices. Advance carries 12.5% interest, settled by extra gas. Contract has fixed monthly gas supply, with cash-settled adjustment for forecast-vs-market price differences. If Uttaranchal defaults, Neelanchal claims at market price. Is this contract within Ind AS 109?

Para 2.4-2.5 of Ind AS 109 — commodity purchase contracts that can be settled net in cash are within Ind AS 109 UNLESS they're held for the entity's own use (own-use exception). Even with cash-settled penalty/price-adjustment features, the contract is generally own-use as long as the physical delivery is genuine and matches usage requirements. The entity can also irrevocably DESIGNATE such contracts as FVTPL at inception only to eliminate accounting mismatch.