Every question in FR, searchable by chapter and source.
Under Ind AS 1, an entity classifies a liability as current if, among other conditions, it expects to settle the liability within:
As per the Conceptual Framework for Financial Reporting under Ind AS, which qualitative characteristic requires that financial information be complete, neutral, and free from error?
A company's current ratio has increased mainly because it entered into significant sale-and-leaseback transactions, converting fixed assets into cash used to repay current liabilities. From an analysis perspective, this improvement should be treated as:
Under the Conceptual Framework, an asset is defined primarily by reference to:
Under Ind AS 109, a financial asset held within a business model whose objective is to collect contractual cash flows, and whose cash flows are solely payments of principal and interest, is measured at:
Under Ind AS 32, a financial instrument that gives the holder the right to receive cash and imposes no obligation on the issuer to deliver cash or another financial asset is classified by the issuer as:
Under Ind AS 1, a complete set of financial statements includes all of the following EXCEPT:
Under Ind AS 103, the acquisition method requires goodwill to be measured, at the acquisition date, as the excess of:
How should Orion treat the standard one-year manufacturer's warranty required by law?
Which of the following is an enhancing, rather than fundamental, qualitative characteristic of useful financial information?
Under Ind AS 109, the expected credit loss model requires an entity to recognise impairment based on:
As per Ind AS 1, which of the following must be presented as a minimum on the face of the statement of profit and loss?
Under Ind AS 115, how many performance obligations exist in a sale that includes both the washing machine and the extended service warranty?
In a business combination achieved in stages (a step acquisition), the acquirer remeasures its previously held equity interest in the acquiree at:
Under Ind AS 103, acquisition-related costs such as legal and advisory fees are:
A declining inventory turnover ratio, when combined with rising revenue, most likely indicates:
For the 600 customers who bought the extended warranty, when should Orion recognise the Rs. 3,000 revenue relating to it?
Return on Capital Employed (ROCE) is generally computed as:
What is the total transaction price for a customer who buys a washing machine along with the extended warranty?
If the standalone selling prices of the washing machine and the extended warranty equal their stated prices (Rs. 25,000 and Rs. 3,000), how is the Rs. 28,000 transaction price allocated?
What is the correct treatment of impairment loss?
The CFO of Aakash Ltd. seeks your advice for the basis on which will the land be fair valued under Ind AS 113?
What is the amount of Aakash Ltd.'s gain on disposal of its investment in Oil Limited?
What will be the treatment of prepayment premium and processing fee of new loan in the financial statements of Aakash Ltd. as per Ind AS 109?
How will the convertible preference shares be classified in the financial statements of Hawk Limited?
What will be the impairment loss from investment of Zest Ltd. in associate Large Ltd. for the year ending 31 st March, 2026?
Determine the amount of consideration for Business Combination for acquiring Sour Ltd.
Compute the value of Fertilizer division's Goodwill at the date of classification after re-measurement.
Calculate the closing balance of Fertilizer division's asset - Property, Plant and Equipment at the period end.
How the Inventory valuation error discovered on 30 th April, 2026 in respect of the cement unit should be corrected?
What amount of Cumulative Catch Up Adjustment is required to be done in Revenue of ABC Ltd.?
Life line Limited has 10,00,000 Ordinary Shares of ` 1 each outstanding. The company has also issued 2,000, 10% Convertible Bonds of ` 100 each. Each bond is convertible into 20 Ordinary Shares on demand. For the current period, Life line Ltd. reported a Profit after Tax of ` 23,25,000. The applicable Income Tax rate is 25%. The average market price of the equity shares during the period was ` 5 per share. Based on Ind AS 33 Earnings Per Share, calculate the Diluted Earnings Per Share for the period.
XYZ Ltd. is a first-time adopter of Ind AS. The company prepares its opening Ind AS Balance Sheet as at 1 st April, 2025. Under previous GAAP, the company had recognized a provision for a lawsuit of ` 10 Lakhs as at 31 st March, 2025 based on the best estimate available at that time. On 15 th April, 2026 (before the approval of financial statements), the lawsuit was settled for ` 15 Lakhs. This information was not available on the transition. date. How should this be reflected in the opening Ind AS Balance Sheet?
In respect of the lease, choose the most appropriate option in preparation of the Statement of Cash Flows (as per Ind AS 7) of Star Limited:
With respect to machine purchased on 1 st April 2024, determine impairment loss (as per Ind AS 36) to be recognized in financial year 2024-2025 and depreciation (as per Ind AS 16) in the financial year 2025-2026 (assuming revised residual value of ` 1.00 lakh);
The total cost as per Ind AS 38 of the software developed by the Company is:
As per Ind AS 37, the Company should recognize a provision in its financial statement with respect to pending legal matters aggregating to:
The amount of the goodwill to be recorded as part of carrying amount of investment by H Limited on acquisition of C Limited on 1 st April 2024 as per fair value method is
The costs that should have been included in the interim financial results of H Limited for quarter ended 30 th September 2024 are:
A Ltd. and B Ltd. are engaged in the manufacturing of homogeneous plastic bottles. A Ltd. operates in the northern, eastern, and central regions of India. B Ltd. operates in the western and southern regions. To fulfill the demand across India, the companies have a non-monetary exchange arrangement where: • A Ltd. supplies bottles to B Ltd. for B Ltd.'s customers in the north, east, and central regions. • B Ltd. supplies bottles to A Ltd. for A Ltd.'s customers in the west and south. • This arrangement is solely to facilitate regional customer orders, and the products are homogeneous. • During the year 2024-2025, for exactly same quantities: Fair value of bottles supplied by A Ltd.: ` 5,00,000 Fair value of bottles supplied by B Ltd.: ` 5,20,000 How should A Ltd. and B Ltd. recognize revenue for the exchange for the year 2024-2025 as per Ind AS 115?
X Ltd. as the reporting entity has net investment in foreign operations in its two foreign subsidiaries, B Ltd. and C Ltd. Loans made between group entities are permanent in nature (that is, settlement is neither planned nor likely to occur), X Ltd., with sterling (£) as its functional currency, is preparing its financial statements for the financial year ending on 31 st March 2025. It has a loan receivable of US$ 1 million from its subsidiary C Ltd. that has been outstanding for some time. The parent notified the subsidiary at the beginning of the financial year that no repayment of the amount will be requested for the foreseeable future. The relevant exchange rates are as follows: Date Exchange (£1 = US$) 31 st March 2024 1.45 31 st March 2025 1.82 Determine the foreign exchange loss to be recognized in Parent X Ltd.'s standalone financial statements at 31 st March 2025 with respect to loan receivable from subsidiary C Ltd.?
You, a Chartered Accountant, have been approached by two partners of a firm who are in the process of dissolving their partnership. Both partners wish to engage you to assist with the financial aspects of the dissolution. Which statement out of the following statements best describes the ethical concern in this situation under the Code of Ethics of the Institute of Chartered Accountants of India?
Which of the following is classified as an enhancing qualitative characteristic of financial information?
An entity has the right to use a patented technology for the next five years and can obtain economic benefits from it. Under the Conceptual Framework, this right is best described as:
Faithful representation requires that the reported information be:
The enhancing characteristic of "timeliness" primarily addresses which of the following concerns?
When a company sells a piece of machinery for more than its carrying amount, the resulting increase is recorded as:
Which statement correctly reflects the definition of a liability?
One of the primary purposes of the Conceptual Framework for Financial Reporting is to:
Control over an economic resource exists when the entity has:
Which measurement basis reflects the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date?
Under the financial capital maintenance concept, profit for a period is recognised when:
Which of the following best illustrates the concept of "faithful representation" in financial reporting?
A company has a legal obligation to restore a leased property to its original condition at the end of the lease term. Under the conceptual framework, this obligation is classified as:
Which pair of qualitative characteristics are considered "fundamental" according to the Conceptual Framework?
An entity records a piece of equipment at its original purchase price of $100,000. Over time, the market price rises to $150,000, but the entity continues to use historical cost. This measurement choice primarily emphasizes which qualitative characteristic?
During a financial period, a firm receives a cash donation from a shareholder that is not a repayment of any capital contribution. Under the elements of financial statements, this cash inflow is classified as:
Which of the following scenarios demonstrates the principle of comparability?
Under the financial capital maintenance concept, a profit is recognized only when:
A firm decides to derecognize a loan receivable after selling it to a third party. Which condition must be satisfied for derecognition under the conceptual framework?
Which enhancing qualitative characteristic is most directly concerned with the ability of different users to reach a consensus about the information presented?
An entity incurs a legal penalty for violating environmental regulations. In the statement of financial performance, this outflow is classified as:
When an entity measures an investment property at fair value, which of the following statements is true regarding the measurement basis?
Company X records a provision for warranty costs based on the best estimate of future claims. Which aspect of faithful representation does this illustrate?
Company Y includes the fair value of a forward contract in its balance sheet, enabling users to anticipate future cash inflows or outflows. Which qualitative characteristic is primarily being demonstrated?
Which of the following practices most enhances comparability of financial statements across reporting periods?
A firm measures its inventory at the lower of cost and net realizable value, using recent market quotations obtained from independent brokers. Which enhancing qualitative characteristic does this measurement primarily satisfy?
An entity publishes its annual report nine months after the fiscal year‑end, causing investors to miss the window for making investment decisions. Which qualitative characteristic is compromised?
A company presents its cash flow statement with clearly labelled sections for operating, investing and financing activities, using simple headings and concise notes. Which qualitative characteristic is most improved by this presentation?
Which of the following items meets the definition of an asset under the Conceptual Framework?
Which of the following items is a liability according to the Conceptual Framework?
A company has total assets of ₹500 million and total liabilities of ₹300 million. What amount represents the equity of the entity?
Under the financial capital maintenance concept, profit for a period is recognised only when net assets at the end of the period exceed net assets at the beginning, after adjusting for distributions to and contributions from owners. Which statement is correct?
A company is preparing its annual financial statements. The management is considering whether to disclose a pending lawsuit that is unlikely to affect cash flows but could influence investors' perception of future profitability. Which qualitative characteristic primarily justifies including this information?
Which of the following best describes the three attributes that must be present for an item to be a faithful representation?
Two manufacturing firms, Alpha Ltd. and Beta Ltd., report inventories using the same accounting policy. However, Alpha presents inventory values in a separate schedule while Beta includes them within the balance sheet. Which enhancing characteristic is primarily affected by this difference?
An auditor obtains independent market quotations for a piece of equipment to confirm the fair value reported by the entity. This procedure primarily tests which qualitative characteristic?
A company decides to postpone reporting a material loss from a foreign exchange transaction until the next quarter, arguing that the information will be more useful then. Which qualitative characteristic is being compromised by this decision?
Which of the following scenarios best illustrates the definition of an asset under the conceptual framework?
During the year, a company receives a cash donation from a charitable foundation that it records as revenue. Which element of financial statements does this transaction violate?
An entity measures its investment property at fair value, while its inventory is measured at historical cost. Which measurement basis is being applied to the investment property?
Which of the following statements best describes the fundamental qualitative characteristic of "faithful representation"?
A company decides to disclose a non‑material expense in the notes rather than in the profit and loss statement. Which qualitative characteristic is most directly affected by this decision?
Which of the following scenarios would most enhance the comparability of financial statements between two reporting periods?
Which of the following best illustrates the concept of verifiability?
Which element of the financial statements does the following transaction affect? "The entity receives cash from a shareholder in exchange for newly issued shares."
Under the definition of an asset, which of the following items would NOT be recognised as an asset on the balance sheet?
Which of the following best captures the definition of a liability?
A company records a gain from the revaluation of its investment property to fair value. Under which element of the financial statements is this gain classified?
Which of the following statements correctly distinguishes income from contributions from owners?
Under the financial capital maintenance concept, an entity will recognise profit for the period only if:
Which enhancing qualitative characteristic is most directly concerned with the speed at which information is provided to users?
A firm decides to present its cash flow statement using the direct method instead of the indirect method. Which qualitative characteristic does this choice primarily enhance?
The concept of property, plant and equipment being recognised at cost initially, and subsequently measured using either the cost model or the revaluation model, is generally understood to reflect the well-established Ind AS principle that an entity may choose a subsequent measurement policy, applied consistently to an entire:
The concept of an intangible asset needing to be 'identifiable' (either separable, or arising from a contractual or other legal right), in addition to being controlled and expected to yield a future economic benefit, is generally understood to reflect the well-established distinction between a recognisable intangible asset and:
The concept of an impairment loss being recognised whenever an asset's own carrying amount exceeds its recoverable amount (the higher of fair value less cost of disposal, and value in use) is generally understood to reflect the well-established principle that an asset should never itself be carried on the balance sheet at a value exceeding its own:
The concept of investment property (land or building held to earn rental or for capital appreciation, rather than for own use or sale in the ordinary course of business) being accounted for separately from owner-occupied property is generally understood to reflect the well-established Ind AS principle that the underlying:
The concept of inventory being measured at the lower of cost and net realisable value is generally understood to reflect the well-established prudence principle that an asset should never itself be carried at an amount exceeding what it is expected to:
The concept of a non-current asset (or disposal group) being classified as 'held for sale' only where it is available for immediate sale and its own sale is highly probable, is generally understood to reflect the well-established Ind AS principle that this classification requires a:
The concept of a lessee recognising a right-of-use asset and a corresponding lease liability for substantially all lease, rather than distinguishing between an operating lease and a finance lease as under the earlier standard, is generally understood to reflect a significant shift toward:
The concept of a biological asset (a living animal or plant) being measured at fair value less cost to sell, both at initial recognition and at each subsequent reporting date, is generally understood to reflect the well-established recognition that a biological asset's own value changes through:
The concept of exploration and evaluation expenditure (incurred in the search for mineral resource, before technical feasibility and commercial viability are demonstrable) being permitted a distinct, interim accounting policy choice is generally understood to reflect the well-established recognition that a uniform standard for such expenditure was not yet:
The concept of the Ind AS 115 five-step model (identify the contract, identify the performance obligation, determine the transaction price, allocate the transaction price, recognise revenue) providing a single, unified framework for revenue recognition across industries is generally understood to reflect a departure from the earlier, more:
The concept of a 'performance obligation' being a distinct promise in a contract to transfer a good or service to the customer is generally understood to be the central unit to which revenue is:
The concept of revenue being recognised either 'at a point in time' or 'over time', depending on when control of the good or service transfers to the customer, is generally understood to reflect the core Ind AS 115 principle that revenue tracks the transfer of:
The concept of 'variable consideration' (such as a discount, rebate, refund, or performance bonus) being included in the transaction price only to the extent it is highly probable that a significant reversal will not occur, is generally understood to reflect a deliberate constraint aimed at avoiding:
The concept of the transaction price being allocated to each performance obligation based on its own relative stand-alone selling price is generally understood to reflect the well-established Ind AS 115 principle that revenue for a bundled contract should reflect what each distinct good or service would have:
The concept of a 'contract asset' (an entity's own right to consideration for a good or service already transferred, before that right becomes unconditional) being distinguished from a receivable is generally understood to reflect the well-established Ind AS 115 principle that a receivable arises only once the entity's own right to consideration becomes:
The concept of a 'contract liability' arising where an entity has received consideration from the customer before transferring the promised good or service is generally understood to reflect the well-established Ind AS 115 principle that revenue is not itself recognised merely because:
The concept of the incremental cost of obtaining a contract (such as a sales commission) being capitalised as an asset, where the entity expects to recover that cost, is generally understood to reflect a deliberate departure from immediately expensing such cost, aimed at matching the cost against the:
The concept of an entity needing to assess whether it is acting as a 'principal' (recognising revenue at the gross amount) or an 'agent' (recognising revenue at the net, commission-only amount) is generally understood to turn on which party controls the good or service before its own:
The concept of a warranty being accounted for as a separate performance obligation only where the customer has the option to purchase it separately, or where it provides a service beyond mere assurance of conformity to specification, is generally understood to distinguish it from an ordinary, assurance-type warranty accounted for under a different, more:
The concept of a right of return being accounted for by recognising revenue only for the good expected to be kept, with a separate refund liability and a separate return asset recognised for the good expected to be returned, is generally understood to reflect a concern with avoiding:
The concept of a 'significant financing component' being adjusted for within the transaction price, where the timing of payment provides the customer or the entity with a significant financing benefit, is generally understood to reflect a concern with separating the revenue for the good or service from the separate:
The concept of an entity needing to disclose disaggregated revenue (such as by category, geography, or timing of transfer) is generally understood to reflect a concern with helping the reader understand how economic factor affect the nature, amount, timing, and:
The concept of revenue being recognised over time only where one of three specific criterion is met (such as the customer receiving and consuming the benefit as the entity performs, or the entity's own performance creating an asset with no alternative use, coupled with an enforceable right to payment) is generally understood to reflect a deliberately:
The overarching relationship between Ind AS 115 and the earlier revenue standards it superseded is generally understood to be that Ind AS 115 replaced a fragmented set of rules with a single, principles-based model, applicable across:
The concept of a complete set of financial statements under Ind AS 1 including a balance sheet, a statement of profit and loss, a statement of changes in equity, a statement of cash flow, and notes, is generally understood to reflect the well-established principle that no single statement alone provides a:
The concept of the 'going concern' assumption underlying the preparation of financial statement, unless management intends to liquidate the entity or has no realistic alternative, is generally understood to reflect the well-established default premise that financial statement are prepared on the basis the entity will continue its:
The concept of the accrual basis of accounting requiring an entity to recognise an item when it meets the definition of an asset, liability, equity, income, or expense, rather than only when cash is received or paid, is generally understood to reflect the well-established distinction between accrual accounting and:
The concept of 'materiality' determining whether an omission or misstatement of an item could influence the decision of a user of the financial statement is generally understood to reflect an entity-specific, judgement-based threshold, rather than a uniform, fixed:
The concept of an entity presenting comparative information for the preceding period, in addition to the current period, unless a relevant Ind AS permits or requires otherwise, is generally understood to reflect a concern with helping the reader assess:
The concept of an entity needing to apply accounting policy consistently from one period to the next, changing it only where required by an Ind AS or where the change results in more relevant and reliable information, is generally understood to reflect a concern with preserving the:
The concept of an entity being prohibited from offsetting an asset against a liability, or income against an expense, unless an Ind AS permits or requires such offset, is generally understood to reflect a concern with preserving the reader's ability to assess the:
The concept of an asset or liability being classified as 'current' where it is expected to be realised or settled within the entity's own normal operating cycle, or within twelve month of the reporting date, is generally understood to reflect a time-based distinction from a:
The concept of the statement of changes in equity reconciling the opening and closing balance of each component of equity, showing the effect of profit, other comprehensive income, and transaction with owner, is generally understood to provide a complete picture of what drove the change in an entity's own:
The concept of 'other comprehensive income' (such as a revaluation surplus, or a remeasurement of a defined benefit plan) being presented separately from profit or loss is generally understood to reflect a well-established distinction between an item recycled through profit or loss, and an item that:
The concept of the notes to the financial statement providing a narrative description of accounting policy, and a detailed breakdown of the line item presented in the primary statement, is generally understood to reflect the well-established recognition that the primary statement alone cannot convey the full:
The concept of a fundamental accounting error, or a material prior-period error, being corrected retrospectively (by restating the comparative figure), rather than being included in the current period's own profit or loss, is generally understood to reflect a concern with preserving the:
The overarching relationship between the various Ind AS on presentation of general purpose financial statement is generally understood to be that they work together to ensure the financial statement, taken as a whole, present a:
The concept of an entity needing to present a third balance sheet (as at the beginning of the earliest comparative period) where it applies an accounting policy retrospectively, or restates or reclassifies an item, is generally understood to reflect a concern with preserving the reader's ability to assess the:
The concept of the statement of profit and loss being permitted to be presented using either a 'nature of expense' classification or a 'function of expense' classification is generally understood to reflect a deliberate flexibility, allowing an entity to choose whichever presentation provides the most:
The concept of every business combination being accounted for using the 'acquisition method' under Ind AS 103 is generally understood to reflect a deliberate move away from any alternative method, such as a pooling-of-interest approach, for a:
The concept of the 'acquirer' needing to be identified in every business combination (the entity that obtains control of the acquiree) is generally understood to be an essential first step, since the entire subsequent acquisition-method accounting depends on knowing which party is:
The concept of goodwill being measured as the excess of the consideration transferred (plus any non-controlling interest and previously-held equity interest) over the net identifiable asset acquired, is generally understood to reflect goodwill's own role as a:
The concept of identifiable asset acquired and liability assumed in a business combination being measured at their own acquisition-date fair value, rather than at their own carrying amount in the acquiree's books, is generally understood to reflect the well-established Ind AS 103 principle that the acquisition itself is treated as a:
The concept of 'non-controlling interest' being measured either at fair value or at its own proportionate share of the acquiree's identifiable net asset (a optional, transaction-by-transaction choice) is generally understood to reflect a deliberate flexibility permitted by Ind AS 103, rather than a single, mandated:
The concept of a 'bargain purchase' (where the net identifiable asset acquired exceeds the consideration transferred) resulting in an immediate gain recognised in profit or loss, rather than being treated as negative goodwill deferred over time, is generally understood to reflect the well-established modern Ind AS view that such an excess should be:
The concept of acquisition-related cost (such as an advisory, legal, or due-diligence fee) being expensed as incurred, rather than being included within the consideration transferred or capitalised as part of goodwill, is generally understood to reflect the well-established Ind AS 103 principle that such cost is not itself part of what was:
The concept of 'contingent consideration' (an additional payment dependent on a future event, such as a target being met) being included in the consideration transferred at its own acquisition-date fair value is generally understood to reflect the well-established recognition that such a future payment is nonetheless a part of the:
The concept of the 'measurement period' (up to one year from the acquisition date) permitting an acquirer to retrospectively adjust a provisional amount, once new information about a fact and circumstance existing at the acquisition date comes to light, is generally understood to reflect a practical recognition that a complete, accurate valuation cannot always be:
The concept of a 'business combination achieved in stage' (where the acquirer held a pre-existing equity interest in the acquiree before obtaining control) requiring the previously-held interest to be remeasured to its own acquisition-date fair value, with any gain or loss recognised in profit or loss, is generally understood to reflect a concern with treating the acquisition date as a meaningful:
The concept of goodwill not being amortised, but instead being tested for impairment at least annually, is generally understood to reflect the well-established recognition that goodwill's own useful life cannot be reliably estimated, unlike a:
The concept of a 'reverse acquisition' (where the legal acquirer is identified as the accounting acquiree, because the legal acquiree's own former owner obtains control of the combined entity) is generally understood to reflect the well-established Ind AS 103 principle that accounting substance governs over the legal:
The concept of Ind AS 103 excluding a common-control combination (a combination between entity already under the same ultimate controlling party, both before and after the combination) from its own scope is generally understood to reflect a recognition that such a combination does not involve any change in:
The overarching relationship between Ind AS 103 and Ind AS 110 (Consolidated Financial Statements) is generally understood to be that Ind AS 103 governs the initial, acquisition-date accounting for a business combination, while Ind AS 110 governs the ongoing:
The concept of a 'business' (as opposed to a mere group of asset) requiring an integrated set of activity and asset capable of being conducted and managed to provide a return to investor is generally understood to reflect the well-established Ind AS 103 threshold that determines whether the acquisition-method accounting applies, or whether the transaction is instead a:
The concept of a 'financial instrument' being any contract that gives rise to a financial asset of one entity and a financial liability, or equity instrument, of another, is generally understood to reflect the broad, contract-based scope of the relevant Ind AS, extending across diverse:
The concept of a financial asset being classified based on both the entity's own business model for managing it, and the contractual cash flow characteristic of the asset itself, is generally understood to reflect the well-established Ind AS 109 principle that classification depends on:
The concept of the 'expected credit loss' (ECL) impairment model requiring an entity to recognise a loss allowance based on a forward-looking estimate of future credit loss, rather than waiting for a loss event to actually occur, is generally understood to reflect a deliberate move away from the earlier, more:
The concept of a financial liability or equity instrument being classified based on the substance of the contractual arrangement, rather than its legal form, is generally understood to reflect the well-established Ind AS 32 principle that a contractual obligation to deliver cash or another financial asset makes an instrument a:
The concept of an embedded derivative needing to be separated from its own host contract only where the embedded derivative's own economic characteristic are not closely related to the host, is generally understood to reflect a concern with ensuring a risky, derivative-like feature is not:
The concept of 'hedge accounting' being an optional, designation-based departure from ordinary measurement rule, permitted only where an entity meets specific qualifying criterion (such as an economic relationship between the hedging instrument and the hedged item) is generally understood to reflect a concern with ensuring hedge accounting is used only for a:
The concept of a financial asset being derecognised only where the entity transfers substantially all the risk and reward of ownership, or loses control over the asset, is generally understood to reflect the well-established Ind AS 109 principle that derecognition tracks the transfer of:
The concept of a compound financial instrument (such as a convertible bond, containing both a liability component and an equity conversion option) needing to be split into its own separate liability and equity component at initial recognition is generally understood to reflect the well-established Ind AS 32 principle that each component should be accounted for according to its own:
The concept of Ind AS 107 requiring extensive disclosure about the nature and extent of risk (such as credit, liquidity, and market risk) arising from a financial instrument is generally understood to reflect a concern with helping the reader understand a risk that may not otherwise be visible from the:
The concept of a financial asset held within a business model whose own objective is 'to collect contractual cash flow' being eligible for amortised-cost measurement, provided its own cash flow are 'solely payment of principal and interest' (SPPI), is generally understood to reflect the well-established recognition that amortised cost is appropriate only for a:
The concept of an equity instrument (such as an investment in another entity's share) being measured at fair value through profit or loss by default, unless the entity makes an irrevocable election to present fair value change through other comprehensive income, is generally understood to reflect the well-established Ind AS 109 recognition that an equity instrument has no:
The concept of a financial guarantee contract being accounted for at the higher of the loss allowance determined under the ECL model, and the amount initially recognised less cumulative amortisation, is generally understood to reflect a concern with ensuring the guarantor's own obligation is never understated relative to its own expected:
The concept of reclassifying a financial asset between measurement category being permitted only where the entity changes its own business model for managing that asset, and being a rare event, is generally understood to reflect a concern with preventing opportunistic, results-driven reclassification, rather than a:
The overarching relationship between Ind AS 109, Ind AS 32, and Ind AS 107 is generally understood to be that the three standards work together to govern the full life-cycle of a financial instrument: classification and measurement, presentation and equity/liability distinction, and:
The concept of the fair value option permitting an entity to irrevocably designate a financial asset or liability at fair value through profit or loss, where doing so eliminates or significantly reduces an accounting mismatch, is generally understood to reflect a concern with allowing measurement to reflect the underlying economic:
The concept of a financial liability being derecognised only where the underlying obligation is discharged, cancelled, or expires, is generally understood to reflect the well-established Ind AS 109 principle that a liability remains on the balance sheet until the entity's own obligation has:
The concept of a preference share being classified as a financial liability where the issuer is contractually obligated to redeem it, rather than being classified as equity merely because it is called a 'share', is generally understood to reflect the same well-established substance-over-form principle applied generally to every:
The concept of ratio analysis expressing the relationship between two related figure in a financial statement is generally understood to be a useful analytical tool because it enables a meaningful comparison across period or across entity of different:
The concept of a liquidity ratio (such as the current ratio or quick ratio) measuring an entity's own ability to meet its own short-term obligation is generally understood to reflect a different analytical focus from a:
The concept of a profitability ratio (such as net profit margin or return on equity) measuring how efficiently an entity converts its own revenue or asset into a profit is generally understood to be a central focus of financial statement analysis, since profitability underlies an entity's own long-term:
The concept of 'horizontal analysis' (comparing a line item across multiple period, expressed as a trend or percentage change) being distinguished from 'vertical analysis' (expressing each line item as a percentage of a base figure within a single period) is generally understood to reflect two complementary, but different, analytical:
The concept of an analyst needing to compare an entity's own ratio against an industry benchmark, rather than evaluating the ratio in isolation, is generally understood to reflect a concern with providing meaningful context, since a ratio's own significance depends heavily on the entity's own:
The concept of 'earning per share' (EPS) being a widely used profitability metric because it expresses the entity's own profit on a per-share basis, enabling a direct comparison of investor return across entity with different share:
The concept of an efficiency ratio (such as inventory turnover or asset turnover) measuring how effectively an entity utilises its own asset to generate revenue is generally understood to reflect an operational focus, distinct from the more purely financial focus of a:
The concept of an analyst needing to be alert to an accounting policy difference (such as a different inventory valuation method) when comparing two entity's own financial statement is generally understood to reflect a concern with avoiding a misleading comparison caused by a difference in:
The concept of 'common-size' financial statement (expressing every line item as a percentage of a base, such as total asset or revenue) being a useful technique for comparing entity of different size is generally understood to reflect the same underlying principle as:
The concept of financial statement analysis having an inherent limitation, since it is based on historical data that may not reflect future performance, is generally understood to reflect a concern with ensuring the analyst does not treat past trend as a:
The concept of the debt-to-equity ratio measuring the proportion of an entity's own capital structure funded by debt relative to equity is generally understood to be a central solvency metric, since a higher ratio generally reflects a greater reliance on:
The concept of cash flow analysis complementing ratio analysis based on the profit and loss and balance sheet is generally understood to reflect a concern with capturing an entity's own cash-generating ability, since a profitable entity may nonetheless face a:
The overarching relationship between the various technique of financial statement analysis (ratio, horizontal, vertical, common-size, and cash flow analysis) is generally understood to be that they complement one another, together providing a more complete picture than any:
The concept of a trend analysis requiring a consistent basis of preparation across the period compared (such as consistent accounting policy and consistent scope of consolidation) is generally understood to reflect a concern with ensuring the observed trend reflects underlying performance change, rather than an artefact of:
The concept of return on capital employed (ROCE) measuring the return an entity generates on the total capital invested (both debt and equity) is generally understood to provide a broader profitability perspective than a return metric based on:
The concept of the interest coverage ratio measuring how many time an entity's own earning could cover its own interest obligation is generally understood to be an important solvency indicator, since a low ratio signals an elevated risk of:
The concept of an analyst needing to consider the notes to the financial statement, and not merely the primary statement's own headline figure, when performing financial statement analysis, is generally understood to reflect a concern with avoiding an incomplete assessment based only on:
The concept of borrowing cost being capitalised as part of the cost of a 'qualifying asset' (an asset that necessarily takes a substantial period to get ready for its own intended use or sale), rather than expensed immediately, is generally understood to reflect the well-established principle that such cost is a direct part of bringing the asset to its own:
The concept of a government grant being recognised in profit or loss over the period necessary to match it with the related cost it is intended to compensate, rather than recognised entirely upon receipt, is generally understood to reflect the well-established matching principle applied to a:
The concept of a foreign currency transaction being translated using the exchange rate at the date of the transaction, with a monetary item retranslated at each subsequent reporting date, is generally understood to reflect a concern with capturing the ongoing economic effect of:
The concept of an entity being required to capitalise a decommissioning or restoration obligation as part of the cost of the related asset, with a corresponding provision recognised for the future obligation, is generally understood to reflect a concern with recognising the full cost of an asset over its own:
The concept of employee benefit expense (such as a defined benefit pension obligation) being measured using an actuarial valuation, with the remeasurement of the obligation recognised in other comprehensive income, is generally understood to reflect a concern with the long-term, uncertain, and:
The concept of deferred tax being recognised for a temporary difference between the carrying amount of an asset or liability and its own tax base is generally understood to reflect a concern with recognising the future tax consequence of a difference that will:
The concept of a provision being recognised only where an entity has a present obligation as a result of a past event, it is probable an outflow of resource will be required, and the amount can be reliably estimated, is generally understood to reflect the well-established Ind AS 37 threshold that distinguishes a provision from a:
The concept of share-based payment expense (such as an employee stock option) being measured at the fair value of the equity instrument granted, and recognised as an expense over the vesting period, is generally understood to reflect the well-established recognition that such a benefit is a real:
The concept of an 'onerous contract' (a contract in which the unavoidable cost of meeting the obligation exceeds the economic benefit expected to be received) requiring a provision for the expected net loss is generally understood to reflect a concern with recognising a loss as soon as it becomes:
The concept of a 'restructuring provision' being recognised only where an entity has a detailed formal plan and has raised a valid expectation among those affected that the restructuring will be carried out, is generally understood to reflect a deliberately high threshold, aimed at avoiding a premature provision for a merely:
The concept of a 'contingent asset' being disclosed, but never recognised as an asset, even where a future inflow is probable, is generally understood to reflect the well-established prudence principle that an asset should not itself be recognised until its own realisation becomes:
The concept of a 'related party transaction' requiring disclosure regardless of whether it occurred on arm's-length term is generally understood to reflect a concern with helping the reader assess whether the underlying entity's own financial position or performance could have been affected by a:
The concept of a 'segment' being reported separately under Ind AS 108 only where it exceeds a quantitative threshold (such as a percentage of total revenue, profit, or asset) is generally understood to reflect a concern with disclosing a meaningful segment, rather than fragmenting disclosure into an excessive number of:
The concept of earning per share being adjusted for a 'dilutive' potential equity instrument (such as a convertible bond or option) to produce a 'diluted EPS' figure is generally understood to reflect a concern with showing the reader the worst-case, most-conservative view of what EPS would be if every dilutive instrument were:
The concept of a 'discontinued operation' being presented separately in the statement of profit and loss, distinguishing it from a continuing operation, is generally understood to reflect a concern with helping the reader assess the ongoing, sustainable earning power of the entity's own:
The concept of an event occurring after the reporting period being classified as either an 'adjusting event' (providing evidence of a condition existing at the reporting date) or a 'non-adjusting event' (indicative of a condition arising after the reporting date) is generally understood to reflect the well-established Ind AS 10 distinction that governs whether the financial statement should itself be:
The overarching relationship between the various Ind AS on 'item impacting the financial statement' (such as borrowing cost, government grant, provision, deferred tax, and subsequent event) is generally understood to be that they each govern a distinct, specific transaction or event, together supplementing the broader presentation and recognition standard to produce a:
The concept of income tax expense comprising both a current tax component (the tax payable for the current period) and a deferred tax component (the future tax consequence of a temporary difference) is generally understood to reflect the well-established recognition that these two components together capture the:
The concept of a change in accounting estimate (such as a revised useful life for depreciation) being applied prospectively, rather than restating a prior period, is generally understood to reflect the well-established distinction between an estimate revision and a correction of a:
The concept of consolidated financial statement presenting the parent and its own subsidiary as a single economic entity, notwithstanding their own separate legal identity, is generally understood to reflect the well-established substance-over-form principle applied at the:
The concept of 'control' (power over the investee, exposure to variable return from it, and the ability to use that power to affect the return) being the single basis for determining whether consolidation is required is generally understood to reflect the well-established Ind AS 110 move away from a narrower, purely:
The concept of an intra-group transaction (such as an inter-company sale, or an inter-company balance) being eliminated in full on consolidation is generally understood to reflect a concern with avoiding the overstatement of the group's own revenue, asset, or profit through a:
The concept of 'non-controlling interest' being presented within equity in the consolidated balance sheet, separately from the parent's own shareholder equity, is generally understood to reflect the well-established recognition that a non-controlling shareholder is nonetheless an equity holder of the:
The concept of an 'associate' (an entity over which the investor has 'significant influence', typically presumed at a 20-50 percent voting interest) being accounted for using the 'equity method', rather than full consolidation, is generally understood to reflect the well-established recognition that significant influence falls short of the full:
The concept of a 'joint venture' (a joint arrangement in which the party have joint control and right to the net asset) being accounted for using the equity method under Ind AS 111 is generally understood to reflect a deliberate move away from the earlier alternative of:
The concept of separate financial statement (the parent's own standalone statement, presented alongside the consolidated statement) accounting for an investment in a subsidiary, associate, or joint venture either at cost, or in accordance with Ind AS 109, is generally understood to reflect a distinct purpose from the consolidated:
The concept of an entity needing to use a uniform set of accounting policy across the group when preparing consolidated financial statement, adjusting a subsidiary's own local policy where it differs, is generally understood to reflect a concern with ensuring the consolidated figure represent a coherent, internally:
The concept of a parent losing control of a subsidiary triggering derecognition of the subsidiary's own asset and liability from the consolidated balance sheet, with any retained interest remeasured to its own fair value, is generally understood to reflect a concern with treating the loss of control as a significant:
The concept of a transaction in which a parent acquires an additional interest in a subsidiary it already controls (without losing or gaining control) being accounted for as a transaction between owner, within equity, rather than through profit or loss, is generally understood to reflect a well-established Ind AS 110 recognition that no:
The concept of an 'investment entity' (an entity whose own business purpose is to invest fund for return, rather than to operate the underlying business) being exempted from consolidating most of its own subsidiary, instead measuring them at fair value, is generally understood to reflect a concern with the information that is most relevant to an investment entity's own:
The concept of goodwill arising on consolidation being calculated using the same acquisition-method principle as an individual business combination is generally understood to reflect the well-established relationship between Ind AS 103 and Ind AS 110, under which the:
The concept of unrealised profit on an intra-group inventory transaction being eliminated from the consolidated closing inventory balance is generally understood to reflect a concern with ensuring the group's own reported inventory is not itself overstated by a:
The concept of a 'structured entity' (an entity designed so that voting or similar right are not the dominant factor in deciding who controls it) still requiring a control assessment under Ind AS 110, notwithstanding the absence of a traditional majority-voting structure, is generally understood to reflect a concern with preventing control from being obscured through:
The concept of consolidated financial statement being required for every subsidiary, regardless of its own size or materiality relative to the group, unless a specific exemption applies, is generally understood to reflect a deliberately comprehensive scope, aimed at avoiding a selective, results-driven:
The overarching relationship between Ind AS 110, Ind AS 28 (Investments in Associates and Joint Ventures), and Ind AS 111 (Joint Arrangements) is generally understood to be that the three standards together provide a graduated framework, applying a different accounting treatment depending on the degree of:
The concept of potential voting right (such as an option or convertible instrument) being considered when assessing control, only where they are substantive (currently exercisable and not merely protective), is generally understood to reflect a concern with assessing control based on a realistic:
The concept of a subsidiary's own financial statement needing to be prepared as at the same reporting date as the parent, or adjusted for a significant intervening transaction where the date differs, is generally understood to reflect a concern with ensuring consolidation reflects a consistent point in:
The concept of profit or loss being attributed between the parent's own owner and the non-controlling interest based on their own respective ownership proportion, even where this results in a deficit balance for the non-controlling interest, is generally understood to reflect the well-established principle that non-controlling interest bears its own proportionate share of both profit and:
The concept of 'fair value' under Ind AS 113 being defined as an 'exit price' (the price received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participant) is generally understood to reflect a market-based, rather than entity-specific,:
The concept of the fair value hierarchy comprising three level (Level 1: quoted price in an active market; Level 2: observable input other than quoted price; Level 3: unobservable input) is generally understood to reflect a deliberate ranking based on the:
The concept of an entity needing to determine fair value assuming the 'highest and best use' of a non-financial asset (the use that maximises its own value) is generally understood to reflect the well-established recognition that fair value should reflect market participant assumption, rather than the entity's own:
The concept of 'historical cost' being the amount of cash or cash equivalent paid, or the fair value of the consideration given, to acquire an asset at the time of acquisition, is generally understood to reflect the well-established recognition that this measurement basis is verifiable and free from subsequent:
The concept of 'current cost' being the amount of cash or cash equivalent that would be required to acquire an equivalent asset currently is generally understood to reflect a different measurement philosophy from historical cost, namely one focused on the asset's own:
The concept of 'present value' discounting a future cash flow to reflect the time value of money is generally understood to be a necessary measurement technique wherever an asset or liability's own value depends on a cash flow expected to be received or paid over a:
The concept of an entity needing to select a valuation technique that maximises the use of relevant observable input and minimises the use of unobservable input, when measuring fair value, is generally understood to reflect a concern with producing the most:
The concept of 'realisable value' (the amount of cash or cash equivalent that could currently be obtained by selling an asset in an orderly disposal) differing from fair value in certain circumstance is generally understood to reflect a subtle but well-established distinction between an entity-specific exit amount and a fully market-based:
The concept of an entity needing to disclose the valuation technique and input used to measure a Level 3 fair value (based on unobservable input) is generally understood to reflect a concern with providing the reader visibility into an inherently more:
The concept of an entity being permitted to choose among multiple measurement basis (such as historical cost, fair value, or current cost) for different asset and liability, rather than a single, uniform basis applied to every item, is generally understood to reflect the well-established recognition that different item warrant a different:
The concept of a 'principal market' (the market with the greatest volume and level of activity for the asset or liability) being used to determine fair value, in the absence of which the 'most advantageous market' is used, is generally understood to reflect a concern with anchoring fair value to the most:
The concept of a non-performance risk (such as an entity's own credit risk) being reflected in the fair value of a liability is generally understood to reflect the well-established recognition that a market participant would factor in the risk that the:
The concept of measurement uncertainty being inherent in any estimation-based measurement basis (such as fair value or present value), even where the estimate is made in good faith and with reasonable care, is generally understood to reflect a concern with acknowledging that a reasonable estimate can nonetheless:
The overarching relationship between Ind AS 113 and the individual Ind AS that require or permit fair value measurement (such as Ind AS 109 and Ind AS 40) is generally understood to be that Ind AS 113 provides a single, consistent framework for how to measure fair value, while the individual standard determine:
The concept of a 'unit of account' (the level at which an asset or liability is aggregated or disaggregated for measurement purpose) needing to be determined before applying a measurement basis is generally understood to reflect a concern with ensuring the measurement is applied at an appropriate, meaningful:
The concept of 'value in use' (the present value of the future cash flow expected from an asset's own continued use) being one of two component compared in an impairment test, alongside fair value less cost of disposal, is generally understood to reflect a concern with capturing an asset's own value from a:
The concept of an entity needing to use a discount rate that reflects the current market assessment of the time value of money and the risk specific to the asset or liability, when computing present value, is generally understood to reflect a concern with avoiding an arbitrary or inappropriate:
The concept of a 'market participant' (an independent, knowledgeable, and willing buyer or seller in the principal or most advantageous market) being the reference point for fair value, rather than the entity itself, is generally understood to reflect the well-established recognition that fair value is a:
The concept of measurement basis selection involving a trade-off between the relevance of a current-value basis (such as fair value) and the verifiability of a historical-cost basis is generally understood to reflect the well-established recognition that no single measurement basis is superior in:
The concept of the statement of cash flow classifying cash flow into operating, investing, and financing activity is generally understood to reflect a concern with helping the reader understand the distinct source and use of cash across an entity's own:
The concept of the cash flow statement being permitted to present operating cash flow using either the 'direct method' (disclosing gross cash receipt and payment) or the 'indirect method' (adjusting profit for non-cash item) is generally understood to reflect a deliberate flexibility, since both method arrive at the same:
The concept of an entity needing to disclose its own judgement, estimate, and assumption that have the most significant effect on the amount recognised in the financial statement is generally understood to reflect a concern with helping the reader understand where the reported figure rest on:
The concept of an entity needing to disclose its own capital management objective, policy, and process is generally understood to reflect a concern with helping the reader understand how the entity manages the risk associated with its own:
The concept of an entity being required to disclose a related party's own name and the nature of the relationship, regardless of whether a transaction actually occurred during the period, is generally understood to reflect a concern with helping the reader assess a potential, ongoing influence, not merely a:
The concept of an entity needing to disclose the terms and condition of an outstanding related party balance, including whether it is secured, and the nature of the consideration to be provided in settlement, is generally understood to reflect a concern with helping the reader assess the collectability and:
The concept of an entity needing to disclose its own key management personnel compensation, categorised into short-term, post-employment, and other benefit, is generally understood to reflect a concern with providing the reader visibility into the cost of:
The concept of an entity needing to reconcile the opening and closing carrying amount of property, plant and equipment, showing the effect of addition, disposal, depreciation, and impairment, is generally understood to reflect a concern with providing the reader a complete view of what drove the:
The concept of an entity needing to disclose contingent liability not recognised as a provision, including the nature of the obligation and an estimate of its own potential financial effect where practicable, is generally understood to reflect a concern with ensuring the reader is not left unaware of a possible future:
The concept of an entity needing to disclose the title, nature, and principal activity of each significant subsidiary, associate, and joint venture within the group is generally understood to reflect a concern with helping the reader understand the composition and:
The concept of an entity needing to disclose the reason for a change in accounting policy, and the amount of the resulting adjustment for the current and prior period, is generally understood to reflect a concern with ensuring the reader understands both why the change occurred and its own:
The concept of an entity needing to disclose the total amount of contractual commitment for the acquisition of property, plant and equipment not yet recognised on the balance sheet is generally understood to reflect a concern with helping the reader anticipate a future:
The concept of an entity needing to disclose the gross amount of cash and cash equivalent held that is not available for use by the group, together with the reason for the restriction, is generally understood to reflect a concern with avoiding a misleading impression of freely available:
The concept of an entity needing to present a reconciliation between the effective tax rate and the applicable statutory tax rate, explaining the cause of any material difference, is generally understood to reflect a concern with helping the reader understand why the reported tax expense may differ from a naive:
The overarching relationship between Ind AS 1's own disclosure requirement and the more specific disclosure requirement in an individual Ind AS (such as Ind AS 24 for related party, or Ind AS 12 for tax) is generally understood to be that Ind AS 1 establishes the overall presentation framework, while the individual standard supply the detailed:
The concept of an entity needing to disclose the methodology and significant assumption used in determining the fair value of an investment property carried at fair value is generally understood to reflect a concern with helping the reader assess the reliability of a:
The concept of an entity needing to disclose the maturity analysis of its own financial liability, showing the remaining contractual maturity, is generally understood to reflect a concern with helping the reader assess the entity's own exposure to:
The concept of an entity needing to disclose its own sensitivity analysis for a significant market risk variable (such as an interest rate or exchange rate) is generally understood to reflect a concern with helping the reader understand the potential impact of a:
The concept of an entity needing to disclose the basis on which it identifies its own reportable segment, including the factor used to identify the entity's own operating segment, is generally understood to reflect a concern with helping the reader understand the logic behind the entity's own:
The concept of a 'liability' being defined as a present obligation of the entity arising from a past event, the settlement of which is expected to result in an outflow of resource embodying economic benefit, is generally understood to reflect the well-established Conceptual Framework definition that underpins every liability-recognising Ind AS, from a:
The concept of a lease liability being initially measured at the present value of the lease payment not yet paid, discounted using the interest rate implicit in the lease or the lessee's own incremental borrowing rate, is generally understood to reflect the well-established Ind AS 116 principle that a long-term obligation should be measured at its own:
The concept of a defined benefit obligation being measured using the 'projected unit credit method', attributing benefit to period of service and applying actuarial assumption, is generally understood to reflect the well-established recognition that such an obligation is too complex and long-term to be measured on any simpler:
The concept of a defined contribution plan being accounted for simply by recognising the contribution as an expense when due, without any actuarial valuation, is generally understood to reflect the well-established distinction that the entity's own obligation is limited to the amount it agrees to contribute, rather than a:
The concept of a current tax liability being measured at the amount expected to be paid to the tax authority, using the tax rate and law that have been enacted or substantively enacted by the reporting date, is generally understood to reflect the well-established recognition that tax measurement should rely on the:
The concept of a variable lease payment (such as one linked to a sales-based percentage) being excluded from the initial measurement of the lease liability, and instead expensed as incurred, is generally understood to reflect a concern with only capitalising a reasonably certain, fixed:
The concept of a liability under a compound financial instrument being measured first, with the residual allocated to equity, is generally understood to reflect the well-established Ind AS 32 sequencing principle that the more objectively measurable:
The concept of a short-term employee benefit (such as accrued wage or annual leave) being recognised as an expense without any discounting, unlike a long-term benefit, is generally understood to reflect a practical recognition that the time value of money is immaterial for an obligation settled within a:
The concept of the remeasurement of a defined benefit obligation (such as an actuarial gain or loss) being recognised in other comprehensive income, and never reclassified to profit or loss, is generally understood to reflect a deliberate choice to keep the volatile, estimation-driven remeasurement effect out of a:
The concept of a deferred tax liability arising from a taxable temporary difference (where the carrying amount of an asset exceeds its own tax base) being recognised in full, subject to limited exception, is generally understood to reflect the well-established recognition that this represents a future tax outflow the entity will:
The concept of a trade payable being initially measured at fair value and subsequently at amortised cost, in the same manner as any other financial liability, is generally understood to reflect the well-established application of Ind AS 109's own general financial liability principle to what is one of the most:
The concept of the lease liability being remeasured where there is a change in the lease term, or a reassessed likelihood of exercising a purchase option, is generally understood to reflect a concern with ensuring the liability continues to reflect the current, best estimate of the entity's own:
The concept of a deferred tax asset being recognised only to the extent it is probable that future taxable profit will be available against which the underlying deductible temporary difference can be utilised is generally understood to reflect the well-established prudence principle applied to a:
The concept of a termination benefit (payable where employment is terminated before the normal retirement date, or where the employee accepts voluntary redundancy) being recognised at the earlier of when the entity can no longer withdraw the offer, or when the related restructuring cost is recognised, is generally understood to reflect a concern with recognising the obligation once it becomes:
The concept of a short-term lease (twelve month or less) or a lease of a low-value asset being permitted a recognition exemption, allowing the lessee to expense the payment on a straight-line basis instead of recognising a lease liability, is generally understood to reflect a practical concern with avoiding a disproportionate:
The overarching relationship between the various Ind AS on liability (such as Ind AS 116 for lease, Ind AS 19 for employee benefit, and Ind AS 12 for tax) is generally understood to be that they each address a distinct source of obligation, together ensuring an entity's own balance sheet reflects the full range of its own:
The concept of a put option written over a non-controlling interest's own share (an 'NCI put') giving rise to a financial liability at the present value of the exercise price is generally understood to reflect the well-established recognition that the group has a potential obligation to:
The concept of an entity being required to unwind the discount on a long-term provision over time, recognising the unwinding as a finance cost, is generally understood to reflect the well-established recognition that the passage of time itself increases the present value of a future:
The concept of an other long-term employee benefit (such as a long-service award, distinct from a post-employment benefit) being measured similarly to a defined benefit obligation, but with the remeasurement recognised in profit or loss rather than other comprehensive income, is generally understood to reflect a deliberate, narrower distinction from a:
The concept of a sale and leaseback transaction requiring the seller-lessee to recognise only the portion of gain relating to the right transferred to the buyer-lessor, rather than the entire gain, is generally understood to reflect a concern with avoiding an overstated gain on a transaction where the seller:
The concept of the Conceptual Framework serving as a foundation for developing new Ind AS and resolving an accounting issue not addressed by an existing standard is generally understood to reflect its own role as an underlying, unifying:
The concept of the Conceptual Framework not itself being an Ind AS, and therefore not overriding any specific requirement of an individual Ind AS where a conflict arises, is generally understood to reflect its own status as a supporting, background document, rather than a:
The concept of 'relevance' and 'faithful representation' being identified as the two fundamental qualitative characteristic that make financial information useful is generally understood to reflect the well-established recognition that information must both matter to a decision, and:
The concept of the four enhancing qualitative characteristic (comparability, verifiability, timeliness, and understandability) being distinguished from the two fundamental characteristic is generally understood to reflect the well-established recognition that the enhancing characteristic improve the usefulness of information that is already relevant and faithfully represented, rather than being:
The concept of 'materiality' being described as an entity-specific aspect of relevance, rather than a uniform, quantitative threshold applied identically across every entity, is generally understood to reflect the well-established recognition that what could influence a decision depends on the circumstance of the:
The concept of the Conceptual Framework identifying the primary user of general purpose financial statement as existing and potential investor, lender, and other creditor is generally understood to reflect a deliberate focus on the group whose own decision most depends on:
The concept of the 'reporting entity' being defined as an entity that chooses, or is required, to prepare general purpose financial statement, without needing to be a legal entity, is generally understood to reflect the well-established recognition that reporting entity status tracks economic activity, not merely:
The concept of an item being recognised in the financial statement only where its own recognition provides relevant information and a faithful representation, rather than merely meeting the definition of an element, is generally understood to reflect the well-established Conceptual Framework distinction between merely being an element, and being:
The concept of 'prudence' being described in the Conceptual Framework as the exercise of caution when making a judgement under uncertainty, without allowing the overstatement or understatement of asset, liability, income, or expense, is generally understood to reflect a modern, neutral conception of prudence, distinct from an older, more:
The concept of the Conceptual Framework describing two possible concept of capital (financial capital and physical capital) and correspondingly two concept of capital maintenance is generally understood to reflect the well-established recognition that 'profit' can be defined differently depending on the chosen:
The concept of 'derecognition' being described in the Conceptual Framework as the removal of a previously recognised asset or liability, occurring when it no longer meets the definition of an asset or liability, is generally understood to reflect the well-established recognition that recognition itself is not a permanent, one-time event, but rather:
The concept of the Conceptual Framework describing equity as the residual interest in the asset of the entity after deducting all its own liability is generally understood to reflect the well-established recognition that equity is not itself an independently defined element, but rather a:
The concept of the Conceptual Framework distinguishing 'income' into revenue and gain, and 'expense' into expense arising in the course of ordinary activity and loss, is generally understood to reflect a deliberately granular breakdown, aimed at helping the reader distinguish a recurring, core item from a:
The concept of the 'cost constraint' being described in the Conceptual Framework, acknowledging that the benefit of providing information should justify the cost of providing it, is generally understood to reflect a pragmatic, real-world recognition that financial reporting is not a costless:
The overarching relationship between the Conceptual Framework and the individual Ind AS is generally understood to be that the Framework provides the underlying rationale and consistent principle from which the individual, more detailed and specific standard are developed, functioning as a:
The concept of the objective of general purpose financial reporting being to provide information useful to the primary user in making decision about providing resource to the entity is generally understood to be the central, guiding purpose from which every other element of the Conceptual Framework:
The concept of 'verifiability' (as an enhancing qualitative characteristic) meaning that different, knowledgeable and independent observer could reach general consensus that a depiction is a faithful representation is generally understood to reflect a concern with information being:
The concept of an 'asset' being defined in the revised Conceptual Framework as a present economic resource controlled by the entity as a result of a past event, with an economic resource being a right that has the potential to produce economic benefit, is generally understood to reflect a deliberate refinement, focused on the 'potential' to produce benefit rather than requiring a:
The concept of the underlying assumption of 'going concern' being described as pervasive across the Conceptual Framework, affecting how asset and liability are measured, is generally understood to reflect the well-established recognition that a different measurement basis may apply where an entity is:
The concept of the Conceptual Framework acknowledging that financial statement are prepared from the perspective of the entity as a whole, rather than from the perspective of any particular group of user, is generally understood to reflect a concern with providing general-purpose information useful to a broad range of decision, rather than tailored to a single:
The concept of Ind AS 41 (Agriculture) requiring recognition of a biological asset only once the entity controls it as a result of a past event, and its own fair value or cost is reliably measurable, is generally understood to reflect the well-established general recognition principle applied to a distinctive, growing:
The concept of Ind AS 106 (Exploration for and Evaluation of Mineral Resource) permitting an entity to continue applying its own existing accounting policy for exploration and evaluation expenditure, subject to a minimum consistency requirement, is generally understood to reflect the well-established recognition that this industry was, at the time, too diverse to support a uniform, prescriptive:
The concept of Ind AS 102 (Share-based Payment) requiring an equity-settled share-based payment transaction to be measured at the fair value of the good or service received, or by reference to the fair value of the equity instrument granted where the former cannot be reliably estimated, is generally understood to reflect a concern with ensuring such a transaction is not left:
The concept of Ind AS 20 (Government Grant and Government Assistance) distinguishing a grant related to asset (recognised over the asset's own useful life) from a grant related to income (recognised to match the related cost) is generally understood to reflect the well-established recognition that the appropriate recognition pattern depends on what the grant is intended to:
The concept of Ind AS 34 (Interim Financial Reporting) prescribing the minimum content of an interim financial report, and requiring the same accounting policy as used in the annual statement, is generally understood to reflect a concern with ensuring interim information is both timely and:
The concept of Ind AS 29 (Financial Reporting in Hyperinflationary Economy) requiring the financial statement of an entity operating in such an economy to be restated in terms of the measuring unit current at the reporting date is generally understood to reflect a concern with ensuring the reported figure remain meaningful despite a rapidly:
The concept of Ind AS 24 (Related Party Disclosure) defining a 'related party' broadly, covering both an entity and an individual with control, joint control, or significant influence, is generally understood to reflect a concern with capturing every relationship that could affect the entity's own transaction, regardless of a:
The concept of Ind AS 33 (Earning Per Share) requiring an entity to present both basic and diluted EPS with equal prominence on the face of the statement of profit and loss is generally understood to reflect a concern with avoiding a selective emphasis on the more favourable, less conservative:
The concept of Ind AS 105 (Non-current Asset Held for Sale and Discontinued Operation) requiring a held-for-sale asset to cease being depreciated is generally understood to reflect the well-established recognition that depreciation reflects ongoing use, which is inconsistent with an asset being actively:
The concept of Ind AS 27 (Separate Financial Statement) permitting an investment in a subsidiary, joint venture, or associate to be accounted for at cost, in accordance with Ind AS 109, or using the equity method, in an entity's own standalone statement, is generally understood to reflect a deliberate flexibility distinct from the mandatory approach used in:
The concept of Ind AS 21 (The Effects of Changes in Foreign Exchange Rate) requiring an entity to determine its own 'functional currency' (the currency of the primary economic environment in which it operates) before applying the standard's own translation rule is generally understood to reflect a concern with anchoring translation to the economic:
The concept of Ind AS 40 (Investment Property) permitting an entity to choose between the cost model and the fair value model for subsequent measurement, applied consistently to all its own investment property, is generally understood to reflect a deliberate flexibility, distinct from the more restricted choice available for owner-occupied property under:
The concept of Ind AS 8 (Accounting Policy, Change in Accounting Estimate and Error) providing a clear hierarchy for selecting an accounting policy where an Ind AS does not specifically apply, directing an entity to first look to a closely related Ind AS is generally understood to reflect a concern with ensuring policy choice remains:
The overarching relationship between the various 'other' Ind AS (such as Ind AS 41, Ind AS 106, Ind AS 20, and Ind AS 29) and the more central, widely applicable standard (such as Ind AS 1, Ind AS 109, and Ind AS 115) is generally understood to be that the 'other' standard address a narrower, industry- or circumstance-specific issue, while the central standard govern the:
The concept of Ind AS 23 (Borrowing Cost) requiring capitalisation to cease once substantially all the activity necessary to prepare the qualifying asset for its own intended use are complete is generally understood to reflect a concern with limiting capitalisation to the period necessary to:
The concept of Ind AS 36 (Impairment of Asset) requiring a cash-generating unit (the smallest identifiable group of asset that generates cash inflow largely independent of other asset) to be used for impairment testing where an individual asset's own recoverable amount cannot be estimated is generally understood to reflect a practical recognition that:
The concept of Ind AS 38 (Intangible Asset) distinguishing the 'research phase' (expensed as incurred) from the 'development phase' (capitalised once specific criterion are met) of an internal project is generally understood to reflect the well-established recognition that only the development phase demonstrates a sufficient level of:
The concept of Ind AS 16 (Property, Plant and Equipment) requiring depreciation to be allocated on a systematic basis over an asset's own useful life, rather than its physical life, is generally understood to reflect the well-established recognition that depreciation tracks the consumption of economic benefit over the period the asset is expected to be:
The concept of Ind AS 2 (Inventory) excluding a holding cost (such as storage cost not necessary for production) from the cost of inventory, instead expensing it as incurred, is generally understood to reflect a concern with limiting inventory cost to expenditure that brings the inventory to its own present location and:
The concept of Ind AS 7 (Statement of Cash Flow) defining 'cash equivalent' as a short-term, highly liquid investment readily convertible to a known amount of cash, and subject to an insignificant risk of change in value, is generally understood to reflect a concern with including only a near-cash investment, not a:
The concept of Ind AS 101 requiring a first-time adopter to prepare an 'opening Ind AS balance sheet' at the date of transition, applying every Ind AS retrospectively as its own starting point, is generally understood to reflect a concern with establishing a clean, consistent foundation before:
The concept of Ind AS 101 providing certain mandatory exception to retrospective application (such as for a derecognition or hedge accounting matter) is generally understood to reflect a recognition that a full, unqualified retrospective application would in certain case require:
The concept of Ind AS 101 providing several optional exemption (such as electing to use fair value as deemed cost for property, plant and equipment) is generally understood to reflect a concern with reducing the cost and practical difficulty of a full retrospective restatement, where a reasonable:
The concept of a first-time adopter needing to reconcile its own previous GAAP equity to Ind AS equity, both at the date of transition and at the end of the last period reported under previous GAAP, is generally understood to reflect a concern with helping the reader understand the quantitative effect of:
The concept of a first-time adopter needing to reconcile its own previous GAAP total comprehensive income to Ind AS total comprehensive income for the last period reported under previous GAAP is generally understood to reflect a concern with providing the reader a complete view of the transition's own effect on both:
The concept of an estimate made under Ind AS at the date of transition needing to be consistent with the estimate made for the same date under previous GAAP (adjusted only for a difference in accounting policy), unless there is objective evidence that the estimate was in error, is generally understood to reflect a concern with preventing:
The concept of Ind AS 101 requiring a first-time adopter to apply the same Ind AS accounting policy throughout all period presented in its own first Ind AS financial statement, rather than a different policy for each period, is generally understood to reflect a concern with internal:
The concept of a first-time adopter being permitted an optional exemption to designate a previously recognised financial asset or financial liability as measured at fair value through profit or loss at the date of transition is generally understood to reflect a practical recognition that a retrospective, strict application of the original designation rule may be:
The concept of a first-time adopter needing to explain how the transition from previous GAAP to Ind AS affected its own reported financial position, financial performance, and cash flow is generally understood to reflect a concern with ensuring transparency around what is a significant, one-time:
The concept of Ind AS 101 being itself an Ind AS, applied only once, at the point of first-time adoption, is generally understood to reflect its own distinct, transitional purpose, unlike an other Ind AS that applies on an:
The concept of a first-time adopter being generally prohibited from retrospectively creating or reversing a hedging relationship that did not exist under previous GAAP is generally understood to reflect a concern with preventing an opportunistic, hindsight-driven:
The concept of a first-time adopter needing to derecognise every previous-GAAP asset and liability that does not meet the Ind AS definition of an asset or liability at the date of transition is generally understood to reflect a concern with ensuring the opening Ind AS balance sheet reflects only what qualifies under the:
The concept of a first-time adopter needing to reclassify item previously recognised under previous GAAP into the appropriate Ind AS category (such as reclassifying a preference share previously treated as equity into a financial liability) is generally understood to reflect a concern with ensuring the opening Ind AS balance sheet reflects the correct:
The overarching relationship between Ind AS 101 and the rest of the Ind AS body of standard is generally understood to be that Ind AS 101 provides the bridge that translates an entity's own previous accounting basis into a compliant Ind AS starting point, after which the other standard govern:
The concept of Ind AS 101 requiring an entity to use the same set of accounting policy in both its own opening Ind AS balance sheet and throughout every period presented in its own first Ind AS financial statement is generally understood to reflect a concern with avoiding an inconsistent, piecemeal application of the:
The concept of a first-time adopter needing to disclose material adjustment made in transitioning from previous GAAP to Ind AS, distinguishing a correction of an error from a change in accounting policy, is generally understood to reflect a concern with helping the reader understand the nature and reason behind each:
The concept of a first-time adopter being permitted an optional exemption regarding cumulative translation difference on a foreign operation, allowing them to be deemed zero at the date of transition, is generally understood to reflect a recognition that reconstructing such a cumulative figure retrospectively could be:
The concept of a first-time adopter needing to apply Ind AS 109's own classification and measurement rule for a financial asset based on fact and circumstance existing at the date of transition, rather than at the original transaction date, is generally understood to reflect a practical accommodation for the reality that first-time adoption occurs at a later:
The concept of an entity needing to present at least one year of comparative Ind AS financial information alongside its own first full Ind AS financial statement is generally understood to reflect the well-established recognition that even a first-time adopter's own statement should retain the benefit of:
The concept of Ind AS 101's own deemed cost exemption (permitting a first-time adopter to use fair value at the date of transition as the deemed cost for property, plant and equipment) being an alternative to reconstructing the full historical cost record is generally understood to reflect a practical recognition that an old, fully retrospective cost record may no longer be:
The concept of 'integrity' being a fundamental principle requiring a chartered accountant to be straightforward and honest in all professional and business relationship is generally understood to reflect the foundational role integrity plays beneath every other ethical:
The concept of 'objectivity' requiring a chartered accountant to not allow bias, conflict of interest, or undue influence of other to override professional or business judgement is generally understood to reflect a concern with ensuring the professional's own conclusion remains:
The concept of 'professional competence and due care' requiring a chartered accountant to maintain professional knowledge and skill at the level required to ensure a client receives competent professional service is generally understood to reflect a concern with the ongoing need for continued:
The concept of 'confidentiality' requiring a chartered accountant to respect the confidentiality of information acquired through professional and business relationship, not disclosing it without proper and specific authority, is generally understood to reflect a concern with the trust-based nature of the relationship between a professional and their own:
The concept of 'professional behaviour' requiring a chartered accountant to comply with relevant law and regulation, and avoid any conduct that discredits the profession, is generally understood to reflect a concern with preserving the collective:
The concept of the 'conceptual framework approach' to ethics requiring a chartered accountant to identify, evaluate, and address a threat to compliance with the fundamental principle, rather than relying on an exhaustive list of prohibited rule, is generally understood to reflect a recognition that ethical challenge are too varied to be captured by a:
The concept of a 'self-interest threat' (where a chartered accountant's own financial or other interest could inappropriately influence their own judgement or behaviour) being one of five threat category identified in the ethical framework is generally understood to reflect a concern with the risk that personal:
The concept of a 'self-review threat' (where a chartered accountant must evaluate their own own prior judgement or work) being distinguished from a 'familiarity threat' (arising from a long or close relationship with a client) is generally understood to reflect the well-established recognition that different circumstance give rise to different kind of:
The concept of an 'intimidation threat' (where a chartered accountant may be deterred from acting objectively because of an actual or perceived pressure, including an attempt to exercise undue influence) being a recognised threat category is generally understood to reflect a concern with a client or other party attempting to:
The concept of an 'advocacy threat' (where a chartered accountant may promote a client's position to the point that their own objectivity is compromised) arising when a professional takes a one-sided position on behalf of a client is generally understood to reflect a concern with the professional's own role shifting from an objective evaluator toward a:
The concept of a chartered accountant needing to apply 'safeguard' (action or other measure that eliminate a threat or reduce it to an acceptable level) once a threat to a fundamental principle is identified is generally understood to reflect the well-established recognition that identifying a threat alone is insufficient without a corresponding:
The concept of an auditor being required to be independent, both 'in mind' (a state of mind free of bias) and 'in appearance' (avoiding fact and circumstance that would lead a reasonable third party to conclude independence is compromised), is generally understood to reflect the well-established recognition that public confidence depends on both:
The concept of a chartered accountant owing a responsibility to the public interest, beyond just the immediate client or employer, is generally understood to reflect the well-established distinguishing feature that separates a profession from an ordinary:
The concept of an exception permitting a chartered accountant to disclose confidential information where required by law, or where compelled by legal process, is generally understood to reflect the well-established recognition that the confidentiality principle is not absolute, but subject to a narrow, well-defined set of:
The overarching relationship between the fundamental ethical principle (integrity, objectivity, competence, confidentiality, and professional behaviour) and the specific rule of the professional code of conduct is generally understood to be that the fundamental principle establish the underlying value, while the specific rule provide the concrete, operational:
The concept of a 'familiarity threat' arising from a long or close relationship with a client or employer, leading a chartered accountant to become too sympathetic to their own interest, is generally understood to reflect a concern with a close relationship gradually eroding professional:
The concept of a chartered accountant needing to evaluate the significance of an identified threat, considering both qualitative and quantitative factor, before determining whether a safeguard is necessary, is generally understood to reflect the well-established recognition that not every threat is of equal:
The concept of a chartered accountant needing to withdraw from an engagement where a threat cannot be reduced to an acceptable level through any available safeguard is generally understood to reflect the well-established recognition that some circumstance leave no option but:
The concept of a chartered accountant in business (employed by rather than providing service to an organisation) still being subject to the same fundamental ethical principle as a chartered accountant in public practice is generally understood to reflect the well-established recognition that ethical obligation attach to the individual professional, regardless of their own:
The concept of a chartered accountant needing to resist pressure from a superior or colleague to act contrary to a fundamental ethical principle, even where refusing may have adverse professional consequence, is generally understood to reflect the well-established recognition that ethical obligation take priority over organisational or:
The concept of an Enterprise Resource Planning (ERP) system integrating financial and operational data across an organisation's own function into a single database is generally understood to reflect a concern with eliminating the inefficiency and error associated with:
The concept of an internal control being embedded within an automated accounting system (such as a system-enforced approval workflow or an automated three-way match) is generally understood to reflect a shift toward preventive, built-in control, rather than relying solely on:
The concept of 'data analytics' being applied to an entire population of transaction, rather than a sample, is generally understood to reflect a shift toward more comprehensive assurance, made possible by the increased:
The concept of blockchain (a distributed, cryptographically-secured ledger shared across multiple party) offering a tamper-evident record of a transaction is generally understood to have potentially significant implication for accounting, since it could reduce the need for a traditional, centralised:
The concept of Robotic Process Automation (RPA) being used to automate a repetitive, rule-based accounting task (such as invoice processing or bank reconciliation) is generally understood to reflect a concern with freeing up human professional time for more:
The concept of cybersecurity risk being a material consideration for an entity's own financial reporting process, given the reliance of modern accounting on networked, digital system, is generally understood to reflect a concern with the potential for a breach to compromise the:
The concept of extensible business reporting language (XBRL) being a globally recognised digital reporting format that tags financial data with a standardised label, is generally understood to reflect a concern with making financial information machine-readable and comparable across:
The concept of an auditor needing to develop an understanding of a client's own IT environment and general IT control, as part of understanding the entity and its own internal control, is generally understood to reflect the well-established recognition that modern financial reporting cannot be understood in isolation from the technology:
The concept of cloud-based accounting software enabling real-time, remote access to financial data from multiple location is generally understood to reflect a shift away from earlier, more:
The concept of artificial intelligence being applied to an accounting task (such as flagging an anomalous transaction for further review) is generally understood to reflect an assistive role, supporting professional judgement rather than:
The concept of an entity needing to maintain adequate 'general IT control' (such as access control, change management, and backup procedure) as a foundation beneath any application-level control is generally understood to reflect the well-established recognition that an application control is only reliable if the broader IT environment it operates within is itself:
The concept of a chartered accountant needing to maintain and continually update their own technological competence, alongside traditional accounting knowledge, is generally understood to reflect a modern extension of the fundamental principle of professional competence and due care, in response to the evolving role of:
The concept of a data breach involving financial or personal information triggering both a legal/regulatory obligation and a reputational risk for an entity is generally understood to reflect the well-established recognition that data security has become an inseparable part of responsible:
The concept of continuous auditing (a technology-enabled approach that monitors transaction on an ongoing, near-real-time basis) being distinguished from a traditional, periodic audit is generally understood to reflect a shift toward earlier detection of an issue, rather than waiting for a:
The overarching relationship between accounting and technology is generally understood to be that technology serves as an evolving set of tool that support and enhance the accounting function, without displacing the underlying accounting principle, judgement, and:
The concept of an entity needing a documented, tested disaster recovery and business continuity plan for its own accounting system is generally understood to reflect a concern with ensuring financial reporting capability can survive a disruptive:
The concept of 'segregation of duty' remaining an essential control principle even within an automated accounting system, implemented through role-based access restriction, is generally understood to reflect the well-established recognition that automation does not itself eliminate the need for:
The concept of an audit trail being embedded automatically within a modern accounting system, logging every change to a transaction record, is generally understood to reflect an advantage over an older, paper-based system, in which such a trail was more:
The concept of a 'digital twin' of a business process (a virtual model used to simulate and analyse an underlying real process) being applied to a finance function is generally understood to reflect an emerging application aimed at helping the entity:
The concept of a reliance on a third-party cloud service provider for accounting data storage requiring the entity to obtain assurance over the provider's own control environment (such as through a third-party assurance report) is generally understood to reflect a concern with the entity's own responsibility for its own data, notwithstanding its own:
At what amount would ABC Ltd. account for the identified liability related to contingent liability and the indemnification assets at the time of acquisition of PQR Ltd. related to court case by the customer?
What will be the impact on goodwill due to recognition of such liability and indemnified asset?
Suppose in case the fair value of the identified liability is ₹ 1.20 crores instead of ₹ 0.70 crore, then what will be the value of the liability and the indemnification assets at the time of acquisition of PQR Ltd.?
On acquisition of RST Ltd. at what amount should indemnification asset be accounted for in relation to 10 class actions?
The amount of depreciation on the asset for the year 20X8 would be-
The amount of depreciation on the asset for the year 20X9 would be-
What will be the carrying value of the asset immediately before its classification as ‘Held for Sale’ as on 28th February, 20X9?
What will be the carrying value of the asset immediately after its classification as ‘Held for Sale’ as on 28th February, 20X9?
What will be the amount of reversal of impairment loss and the carrying value of the asset after reversal of impairment loss as on 30th June, 20X9?
As per Ind AS 34 read with Ind AS 2, what will be the amount of fixed production overhead allocated to actual production and the amount of expenses to be debited/credited to profit and loss account by the end of first quarter?
As per Ind AS 34 read with Ind AS 2, what will be the amount of fixed production overhead allocated to actual production and the amount of expenses to be debited/credited to profit and loss account by the end of second quarter?
What is the amount of revenue to be recognized per membership in the first year and the amount of contract liability per membership against the option given to the customer for renewing the membership at discount?
What is the amount of the biological asset recognised on the date of purchase?
What is the amount of gain or loss recognised on fair valuation of biological asset as on financial year ended 31st March, 20X2?
What is the total cost of production during the year?
What is the value of closing inventory of finished goods at the end of the year?
What is the value of closing inventory of raw materials at the end of the year?
Security deposit will be initially recognized at
Prepaid lease payment will be initially recognized at
At what amount the contingent liability in relation to customer claim should be included in the consolidated balance sheet as on 31st March, 20X1, on accounting of acquisition of XYZ Ltd.?
At what amount the contingent liability be valued after making the adjustment for measurement period and in what account the adjustment is to be made with the difference in the value to previous valuation?
At what amount the contingent liability be valued in the consolidated balance sheet as on 31st March, 20X2, and in what account the adjustment is to be made with the difference in the value to previous valuation?
What is the length of operating cycle for manufacturing an aircraft?
What would be the classification of Trade Receivables in the balance sheet whose amount will be realised in 15 months?
Which of the following statement is correct with respect to entering into sub-contract with F Ltd.?
At what value the property be reclassified as on 30th September, 20X5?
What is the net realizable value of the property as on 31st March, 20X6?
At what value the property (all flats) be shown in the balance sheet as on 31st March, 20X6?
State which of the following statement is correct with respect to Mr. A’s investment in X Ltd.?
State which of the following statement is correct if Mr. A and Ms. B only have significant influence over respective X Ltd. and Z Ltd.?
What will be the initial amount of prepaid lease payment in the lease contract to be recognised by G Ltd. as Right-of-Use Asset?
What will be the amount of interest income on security deposit to be recognised in the financial statements of G Ltd. as on 31st March, 20X2?
Calculate the goodwill / capital reserve on the date of acquisition of R Ltd.?
What will be G Ltd.’s share in the profit and other comprehensive income for the year?
What will be the closing balance of investment in R Ltd. at the end of the year in the books of G Ltd.?
What is the operating cycle of ABC Ltd.?
What would be the classification of trade payables in the balance sheet of ABC Ltd.?
How many operating segments does ABC Ltd. have?
State which of the following statement is NOT correct as per Ind AS 24 with respect to ABC Ltd.’s transactions between PQR Ltd. and LMN Ltd.?
What is the contract term of the contract entered by the gymnasium and a new member?
The amount of fixed production overhead allocated to units produced during the year would be
What is the total fixed and variable production overhead recognized as part of cost of closing inventory of the year?
What amount will be recognized as an expense in the profit and loss account?
What will be the classification of such trade receivables in the books of Z Ltd.?
What will be the classification of such deposits in the books of dealers?
The closing balance of equity share interest in an associate at the end of year 1 will be
The closing balance of preference share interest in an associate at the end of year 1 will be
The closing balance of long-term loan interests in an associate at the end of year 1 will be
Under which activity the advance tax amounting to ₹ 5,30,000 be classified in the statement of cash flows of X Ltd.?
What will the accounting treatment of fixed assets bought and liabilities assumed by X Ltd., in its statement of cash flows?
What will be the treatment for revaluation of trademark on 31st March, 20X3? Ignore computation of amortization on it.
What will be the treatment for revaluation of patent on 31st March, 20X3? Ignore computation of amortization on it.
State which of the following statement is correct with respect to the contract entered by X Ltd. with A Ltd.
How many performance obligations are there?
What would be the total unused vacation in terms of man-days as on 31st March, 20X2?
By what amount should PQR Ltd. make provision for unused paid vacation for the year 20X1-20X2?
What would be the accounting treatment of the processing fee belonging to undisbursed term loan amount, in case future drawdown is probable?
What would be the accounting treatment of the processing fee belonging to undisbursed term loan amount, in case future drawdown is not probable?
What would be the amount of net assets on the acquisition date?
What will be the amount of Goodwill, in case non-controlling interest is measured at fair value?
What will be the amount of Goodwill, in case non-controlling interest is measured at proportionate share of fair value of net assets of JKL Ltd.?
What would be the accounting treatment of 6% convertible debentures on the date of transition?
What would be the amount of financial liability to be recognised in the books of S Ltd. on transition date?
What will be the amount of provision of penalty for illegal use of automobiles, which Z Ltd. have to make as on 31st March, 20X2?
Calculate the amount, which should be shown in “other comprehensive income” for the period ending 31st March, 20X2 on account of equity investment made by Z Ltd.
What will be the finance cost of convertible loan notes issued by Z Ltd., for the period ending 31st March, 20X2?
State which of the following statement is correct with respect to the bonds issued by C Ltd. as on 31st March, 20X4.
What is the transaction price in the arrangement to sell a piece of machinery to the customer?
State which of the following statement is correct with respect to the fraud related to 20X1-20X2 discovered after the end of the reporting period but before the date of approval of financial statements for 20X3-20X4?
What is the amount of deferred tax to be recognised by C Ltd. on goodwill?
Calculate the depreciation charge for Year 3 in accordance with Ind AS 16.
Calculate the depreciation charge for Year 4 in accordance with Ind AS 16.
At what value the license would be recognised by ABC Ltd. as part of the business combination?
What would be the gain or loss on settlement of the license contract?
What would be the amount of purchase consideration to be considered for acquisition of PQR Ltd.
What should be the amount to be added to the numerator for calculating diluted Earnings per Share?
What would be the lease term in the given case?
At what value does the lease liability be recognized initially?
At what value the right of use assets be recognized initially
What would be the amount of depreciation to be charged annually on ROU asset
At what rate, would defer tax be calculated for the year ended 31st March, 20X2
What amount of revenue be recognized for Year 1?
What will be the accounting treatment for the contract extended at the end of year 1 with respect to its revenue recognition?
What would be the remaining total revenue of the contract for 5 years?
What amount of revenue be recognized for Year 2?
State which of the following statements is correct with respect to transactions between A Ltd. and K Ltd. and between A Ltd. and L Ltd. under Ind AS 24?
How should the omission of depreciation of investment property be corrected in the financial statements for the year ended 31st March, 20X4, assuming the impact of the same is considered material?
With respect to point (ii) above, how should ABC Ltd. treat the situation in its financial statements for the financial year 20X3–20X4?
Amount of revenue per membership to be recognized in the first year and the amount of contract liability per membership against the option given to the customer for renewing the membership at discount would be
The approximate cost of turbine at year 1 would be
The current carrying amount of the turbine at the end of 6th year would be
The revised carrying amount of machine after replacement of new turbine would be
The total deferred tax liability of MS Ltd. at 31st March 20X6 would be
The charge to other comprehensive income relating to deferred tax for the year ended 31st March 20X6 would be
Calculate the loss rate of Group X
Calculate loss rate of Group Y
The unrealised profit to be eliminated on sale of inventory would be
In case of N Ltd. sold inventory to XYZ Ltd., the value of inventory appearing in consolidated financial statements of XYZ Ltd. as on 31st March, 20X6 would be
In case of XYZ Ltd. sold inventory to A Ltd., the unrealised profit of XYZ Ltd. would be reversed by debiting
With respect to a joint operation engaged in the business of mining precious metals, how will the liability be disclosed in the books of Tara Ltd.?
Classify the financial asset and determine the subsequent measurement for the aforesaid debenture instrument?
Which of the following option will be considered as Reportable segments for Tara Ltd?
What is the amount of revenue to be recognized by Tara Ltd. for elevator contract during the financial year 20X1-20X2?
After negotiation with the Nationalized Bank, how long-term loan has to be classified in financials for the year ended on 31st March, 20X2?
What will be the impairment loss from investment in associate for the year ending 31st March, 20X2?
What will be the amount of Goodwill as on 31st March, 20X2, arising from the acquisition of Bean Ltd.?
What should be the accounting treatment for the cost incurred for the renovation?
The Net Assets Value will be?
The value of Purchase Consideration will be?
How should Nikhil Private Limited treat the contingent consideration linked to achieving sales?
Determine the value of Investment in Volga Limited as on 31st March, 20X2 in the Consolidated Financial Statements of Raja Limited, if equity method is adopted for valuing the investment in associates.
Determine the amount of gain/loss to be recorded by Raja Limited on disposal of its stake in Sharp Limited.
Determine the amount of goodwill/gain on bargain purchase arising on the acquisition of S Limited.
Determine the amount of exchange loss/gain to be recognized on 31st March, 20X4 in relation to the purchase of raw material from the American Company.
With respect to share appreciation rights, determine the balance of liability at the end of 31.3.20X4 and expense for the financial year 20X3-20X4.
With respect to Optionally Convertible Debentures, determine the finance cost that should be charged to Statement of Profit and Loss as per relevant Ind AS for the year ended 31st March, 20X4.
Determine the amount of preference share dividend to be reduced from profit or loss for the year ended 31st March, 20X4 to compute the basic Earnings per Share.
The value of closing inventory of raw material as on 31st March 20X4 is:
What is the classification of land at Kota as on 31st March 20X3?
Compute the value of flats to be disclosed in the financial statements for the year ended 31st March, 20X4.
Assertion (I): Beta Ltd. will record the share at ₹ 85 and disclose the investment as Level measurement as per Ind AS as on 31st March 20X4. Reason (II): Level 2 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Omega Ltd.'s Cash flow from Operations for financial year 20X3-20X4 is:
The consideration received from the customer is
Upon transfer of control of the 10,000 moulds, the entity will recognise revenue for
The entity recognises revenue of
The entity recognises a refund liability of
The entity recognises a return asset of
The journal entry for the above would be
What is the share of All Limited in the post-acquisition profit of M Limited?
Compute unrealised gain on unsold inventory for All Limited.
What is the share of All Limited in the dividend declared from M Limited?
What is the value of investment in M Limited as on 31st March, 20X4 as per equity method in the consolidated financial statements of All Limited?
What is the approximate gross margin on goods sold by All Limited to M Limited?
What is the value of shares of X Ltd.?
What is the fair value of A Ltd.’s investment in X Ltd.’s shares?
By what amount the revenue be measured and recognised by A Ltd. in the case of telecom segment?
What will be the capitalization rate for computation of borrowing cost on the building based on general borrowings?
What will be the total amount of borrowing cost on specific borrowing?
What will be the total amount of borrowing cost on general borrowing?
What is the relationship of Z Ltd. with H Ltd.?
What is the relationship of G Ltd. with H Ltd.?
What is the relationship of Y Ltd. with H Ltd.?
With respect to point (a), determine the tax base of property, plant and equipment for the year 20X4-20X5.
With respect to point (a), determine defer tax on property, plant and equipment for the year 20X4-20X5.
With respect to point
With respect to point (b), determine defer tax on Product Development Cost for the year 20X4-20X5.
With respect to point (c), determine the tax base of Trade Investment for the year 20X4-20X5.
With respect to point (c), determine defer tax on Trade Investment for the year 20X4-20X5.
Determine the net defer tax asset / liability of Joy Ltd. for the year 20X4-20X5.
With respect to point (a), determine the tax base of Trade Receivables for the year 20X4-20X5.
With respect to point (a), determine defer tax on Trade Receivables for the year 20X4-20X5.
With respect to point (b), determine the tax base of Inventories for the year 20X4-20X5.
With respect to point (b), determine defer tax on Inventories for the year 20X4-20X5.
With respect to point (a), determine the tax base of Government grants for the year 20X4-20X5.
With respect to point (a), determine defer tax on Government grants for the year 20X4-20X5.
With respect to point (b), determine the tax base of liability for product warranty costs for the year 20X4-20X5.
With respect to point (b), determine defer tax on Liability for product warranty costs for the year 20X4-20X5.
With respect to point (c), determine the temporary difference, as per Ind AS 12, on account of Health care benefits for employees for the year 20X4-20X5.
With respect to point (c), determine defer tax on Health care benefits for employees for the year 20X4-20X5.
What cashflow should B Ltd. report, as financing activity in the statement of cash flows?
With respect to point (ii), what costs should be included in the entity's financial report for the quarter ended 30th September 20X2?
What will be the annual depreciation charge on equipment X for years 3 to 10 and the amount of the revaluation surplus that can be transferred to retained earnings annually?
With respect to point (iv), What is the tax base of the intangible asset?
Which one of the following is the appropriate classification for the annual payment of ₹ 12,000 to preference shareholders at year-end?
With respect to a joint operation engaged in the business of mining precious metals, how will the liability be disclosed in the books of U Ltd.?
What is the amount of preference dividend to be reduced from profit or loss for the year for calculating Basic Earnings Per Share?
What amount will be shown as an inflow in respect of earnings from the associate in the statement of cash flows of U Ltd. for the year ended 31st March 20X3?
Calculate the amount of goodwill / gain on bargain purchase arising upon acquisition of S Ltd.
With respect to H Ltd., state whether the error should be reported in the Ind AS financial statements and how to rectify it.
How many performance obligations G Ltd. has, with respect to the contract with the customer to transfer software license?
What is the amount of gain on sale of interest in subsidiary K Ltd.?
How long-term loan from State Bank has to be classified in the financials for the year ended 31st March 20X3 in case ABC Ltd. has not negotiated with the bank for rectification of breach?
After negotiation with State Bank, how long-term loan has to be classified in the financials for the year ended 31st March 20X3?
At what value the raw material Y be measured in the books of ABC Ltd. as per applicable Ind AS?
How should the revenue be recognised in the books of account for the sale of machinery Z?
Compute the value of Specialty chemical division’s Goodwill at the date of classification after re-measurement.
Calculate the closing balance of Specialty chemical division’s asset – Property, Plant and Equipment at the period end.
What amount of grant out of ₹ 15 million with respect to construction of factory be transferred to profit and loss account in the year 20X3-20X4?
What would be the treatment of grant of ₹ 6 million received from the government as an inducement to DEF Ltd. to begin developing the factory?
What would be the initial measurement of financial instruments as subscription of loan notes in Z Ltd.?
What would be the closing balance of financial instruments (as subscription of loan notes in Z Ltd.) as on 31st March 20X2?
With respect to point (ii), what is the nature of the agreement?
What will the initial cost of PPE appearing in the books of HIJ Ltd.?
Calculate the depreciation charge for the year ended 31st March 20X2 to be charged by G Ltd. in its books?
Which of the following items need to be capitalized in determining the cost of Production Line?
Calculate the company’s associate Flynet Ltd.’s cash flow from operations.
What accounting treatment should be done in FA Ltd.’s books for the year ending 31st March 20X3, as the customer has taken legal action against the Company on the loss of profits that has arisen as a result of the problems with the system?
Compute the total amount to be charged to the Statement of Profit and Loss with respect to Production Line for the year ending 31st March 20X3 and the balance of Provision for Dismantling Cost carried to Balance Sheet.
Compute the cost of the production Line to be capitalized initially on 31st May, 20X2.
At what amount HSL shall carry its investments in NM Limited in its consolidated financial statements as at 31st March, 20X2?
What shall be the accounting treatment of directly attributable expenses of ₹ 2 lakh incurred in connection with the issue of Compulsory Convertible Debentures?
With more acquisitions, at the end of the year, HSL has investments in 2 subsidiaries, 3 associates and 1 joint venture. Which of the following statements is correct in relation to accounting of these investments in separate financial statements?
With respect to the SPA entered by HSL, determine the date when HSL gained control over FM Limited
How should the instrument be classified by NM Ltd. in the first 10 years in accordance with Ind AS 32? Select which one of the following is correct.
How can S Limited account for a hedge relationship for the purpose of preparing H Limited's consolidated financial statements?
How should NM Limited initially recognise the purchase of its machinery?
What is the fair value of the loan to be initially recorded in the books of A Ltd., on 1st April, 20X1?
What is the amount of grant to be recognised initially in the books of A Ltd., on 1st April, 20X1?
What is the amount of depreciation to be recognised for the year 20X1-20X2 on wastewater treatment plant?
What is the amount of grant income to be recognised in the books for the year 20X1-20X2?
Which of the following statements correctly describe the accounting of lease arrangement for the retail store?
What shall be the right accounting of tax losses accumulated by Vikash Retail Private Limited in its separate financial statements?
What shall be the accounting treatment of share appreciation rights given, in standalone financial statements of parent and subsidiary?
Which of the following statements is correct for calculation of earnings per share of the Company for the year ended 31st March, 20X4?
How should the Company account for the amount invested in its own shares and profit earned or loss incurred on those shares while selling back in the market (to settle the SAR scheme)?
At what amount the Company shall carry its investments in NM Limited in its consolidated financial statements as at 31st December 20X2?
What would be the amount of Deferred Tax Asset or Liability that the Company should recognize as on 31st March, 20X3 on the cost incurred on the issue of equity shares during the year?
What would be carrying amount of the acquired software in the books of accounts of New Age Technology Limited as at 31st March, 20X3?
At what value should New Age Technology Limited record the high-end laptop purchased in exchange for its existing server in its books of accounts?
Determine the amount of variable consideration Building & Co. Limited should recognize in its contract with Radar Company Limited to build a manufacturing facility.
The CFO of the Company has requested you to review the interim financial statements of the third quarter ended 31st December, 20X2 to ascertain the correct net profit to be presented to the Board of Directors. What is the correct amount of profit to be reported in the interim financial statements?
Would the error of classifying certain other expenses instead of finance costs in the comparative amounts (31st March, 20X2) be considered as correction of an error? Would the entity need to present a third balance sheet in its financial statements for the year ended 31st March, 20X3?
The CFO of the Company has requested you to evaluate whether the acquisition of Concrete Mixers Private Limited will be covered in Ind AS 103 ‘Business combinations’ or whether the under-construction plant should be accounted for as an asset acquisition? What factors will you consider in your evaluation?
In case of the foreign currency borrowing obtained by Buildings & Co. Limited, what is the amount of borrowing cost eligible for capitalization for the construction of the fabrication plant (assume eligibility conditions related to capitalization of borrowing cost are met)?
Whether 6% CNRPS can be classified as:
Whether 6% NCNRPS can be classified as:
Whether 6% NRCMP can be classified as:
If SEL issues 2,000 convertible bonds of FC 1,000 per bond, assuming no transaction costs, on initial recognition:
If SEL issues the year mandatorily convertible instruments for FC 1.0 million, assuming no transaction costs and market interest rate for similar debt instrument without conversion option is 8% per annum, on initial recognition:
What will be the weighted average annual income tax rate for Narayan Ltd.?
What will be the tax expense for quarter III and quarter IV?
What will be the transaction price for C Ltd.?
What will be the total cost of the property to X Ltd.?
What will be the cost of the investment property to be reflected in the balance sheet of X Ltd.?
What will be the cost of the owner-occupied property to be reflected in the balance sheet of X Ltd.?
What will be the value of goodwill on the acquisition of M Ltd., in Euro, as on 30th September, 20X1?
What will be the value of goodwill to be recognised in the financial statements of G Ltd. as on 31st March, 20X2?
What will be the initial amount of prepaid lease payment in the lease contract to be recognised by G Ltd.?
State which of the following is true for A Ltd. as per the requirements of Ind AS 110?
Assume the same facts as given in the scenario for wholly owned subsidiaries A Ltd., X Ltd. is a foreign entity and is listed in stock exchange of a foreign country and it prepares its financial statements as per the generally accepted accounting principles (GAAP) applicable to that country. Now state which of the following is true for A Ltd. as per the requirements of Ind AS 110?
Assume the same facts as given in the scenario except that 100% of the investment in A Ltd. is held by Mr. X (an individual) instead of X Ltd. Now state which of the following is true for A Ltd. as per the requirements of Ind AS 110?
Which of the following statements is true with respect to preparation of financial statements?
State which of the following is the challenge of the automation process:
With respect to investment in bonds, interest income during the currency of the bond, in the cash flow statement will be treated as:
How the maturity proceeds of bonds will be treated in the cash flow statement?
With respect to legal claim for damages filed by its customer, MIL should recognize a provision of
The contract to supply 10,00,000 strips requires a provision of
What is the date of approval for issue of-the financial statements?
Show the amount to be recognized in balance sheet at 31st December, 20X1 of property, plant and equipment for purchases of machine from foreign supplier.
Calculate the gain on revaluation of the derivative for the year ended 31st December, 20X2.
Calculate the net carrying amount of property, plant and equipment (machine purchased from foreign supplier) as at 31st December, 20X2.
At which time the hedging instrument as derivative in this case is to be derecognized from books?
Considering the principles of Ind AS, determine the accounting for machinery held by A Ltd.?
How should A Ltd. account for the subsidy received from the Government for setting up approved industrial activities in north-east states?
Determine the amounts to be recognised in the statement of profit and loss in relation to share-based payments?
Determine the weighted average number of shares which would be used in the calculation of basic EPS under Ind AS?
How should A Ltd. classify the building as given in the scenario?
Based on the facts given in scenario (i), what will be basic EPS of the entity?
Based on the facts given in scenario (i), what will be diluted EPS of the entity?
What is the nature of the contract entered into for cocoa beans?
What is the nature of the financial instrument mentioned in point (iii)?
What is the fair value of the total consideration transferred by PQR Ltd. to XYZ Ltd.?
What is the amount of goodwill in the said business combination?
What is the gain on previously held interest in XYZ Ltd. recognised in profit or loss?
What is the transition date for PQR Ltd. for adopting Ind AS?
PQR Ltd. present its comparatives financial statements for the year-
Jatin purchases investment properties and funds this by issuing bonds in the market. The liability in respect of the bonds is designated to be measured at fair value through profit or loss. The bonds had an overall fair value decline of Rs 50 crores in the year, out of which Rs 5 crores relates to decrease in Jatin’s credit worthiness. Which of the following is the correct accounting treatment ?
A Ltd is a public sector entity under the Ministry of Defense and is in the business of construction of warships. The contracts are awarded on fixed price basis except certain variable components, such as, foreign exchange variation and cost of spares etc. The payment for fixed price part is on the basis of completion of milestones. The payment for variable component is based on actual cost to the shipyard. The payment terms for the fixed price portion of the contract are generally spread over 10-12 milestones starting with initial payment of 10% on signing of the contract. As the gestation period of the contracts for shipbuilding is longer, it so happens that during initial period when funds are made available, at times, become temporary surplus funds, which are deployed in short-term fixed deposits. However, in the later part of the execution of the contract, the cost incurred on the project exceeds the stage payments received on the vessel leading to a negative cash flow. Further, the last stage payment of the project is deferred till one year after the delivery of the vessel. Thus, the interest earned initially on the temporary surplus compensates to a certain extent for the period of deficit cash flow, especially at the later part of the execution of the project. A Ltd wants to check the presentation requirement of interest earned on deposits made out of temporary surplus as per AS?
An asset had a carrying value of Rs.10,00,000 as on 1st April 20X1. It was revalued at Rs. 11,00,000 as on 31st March 20X2 by crediting the increase of Rs. 1,00,000 to revaluation surplus. Later it was sold for Rs. 12,50,000 on 30 June 20X2. The amount to be taken to Retained Earning would be :
A Ltd is following IND AS for the first time for the year ended 31st March, 20X4. What all period balance sheet to be covered in its first IND AS financial statements?
Company XYZ Pvt Ltd was having its net worth of ₹ 230 Crores as on 31st March 2020. It made a profit of ₹ 30 Crores in FY 20-21 and made a loss of ₹ 15 crores in FY 21-22. From which date it is required to apply IND AS?
For preparing IND AS based financial statements with transition date 1st April, 20X5, what all guidance needs to be referred by A Ltd.?
IND AS 103 contains additional guidance on common control transaction which is not there in IFRS 3. How this can be termed?
Which one of the following is the benefit of implementation of Indian Accounting Standards (IND AS) in India?
Country X has taken approach of implementing Global Accounting Standards in its country with some significant changes in line with their national economic policies. This would be termed as ____________
Company ABC Insurance Pvt Ltd is engaged in the business of insurance and is having a net worth of Rs. 1,000 crores as on 31st March 2017. From which financial year it is required to apply IND AS?
Which of the following statements is false with respect to CONTROL? An entity controls an economic resource if:
Which of the following is not the limitation of 'General Purpose Financial Reporting'?
Which of the following is true with respect to the cost constraint on useful financial information?
Which of the following statements is false for Consolidated and unconsolidated financial statements ?
The usefulness of financial information is enhanced if it is:
Which of the following definitions is incorrect?
Which of the following statements is false with respect to Reporting Period?
Which of the following statements are true with respect to The Reporting Entity?
Which of the following statements is false with respect to Going concern assumptions?
To be a perfectly faithful representation, a depiction would not have the following characteristic -
An entity shall present a third balance sheet as at the beginning of the preceding period in addition to the minimum Comparative financial statements if____
Application of IND AS 1 is important for -
An entity Mru Ltd presents an analysis of expenses recognised in the profit or loss using a classification based on the nature of expenses method. Which of the following is not the classification using the nature of expense?
An inappropriate accounting policy of the entity cannot be rectified by the following ways:
As per IND AS 1, the amount in the other comprehensive income will -
An entity whose financial statements comply with IND AS shall make an __________ statement of such compliance in the notes
IND AS 1 applies to all entities except :
Which of the following information of the entity is not mandatory to be displayed prominently, and is to be repeated when necessary for the information presented to be understandable ?
Which of the following inventory would be measured at lower of cost and net realisable value?
A Ltd shipped inventory on consignment to B Ltd. How should the consigned inventory to be treated assuming the inventory is unsold by B Ltd.?
Mru Ltd has been valuing inventory on a first-in-first-out basis but in line with methods used by industry peers, the company has decided to move to weighted average method. What is your advice with regard to the disclosure of the change under IND AS?
At the end of an accounting period, the cost of a company’s inventory is Rs. 4,50,000. This includes damaged items with a cost of Rs. 25,000 which are expected to be sold for only Rs. 10,000 (less selling expenses of 5%). All other items of inventory have a net realisable value which exceeds cost. As per IND AS 2, the amount at which the company's inventory should be recognized at the end of the period is:
P Ltd. has a plant with the normal capacity to produce 5,00,000 units of a product per annum and the expected fixed overhead is "15,00,000. However, actual production is 3,75,000 units. Amount of fixed overhead to be included in the cost of inventory would be -
Normal Annual Capacity of the Plant X is 1,000 Units. During the year ended 31st March 20X2, the company is able to produce only 700 units (due to sudden strike of union labour). During the current year, company have incurred Rs. 21,000 of fixed over heads. Inventory Quantity as at 31.3.20X2 is 200 Units. Determine the amount of fixed overheads allocation that needs to be done on the inventory lying in hand as at 31.3.20X2 as per IND AS 2?
Hari Limited is a manufacturer of Carton Boxes. The cost of the stock as on 31.12.20X1 was Rs. 50 per box. The accountant noted that the subsequent sale was made on 31.1.20X2 at Rs. 40 per box. The accountant also noted that there were subsequent expenses for some rectification on the entire physical stock that was available as at year end at the rate of Rs. 15 per box to saleable condition. The company seeks your opinion as to the amount of net realisable value and written down loss for the closing stock as per IND AS 2.
Aakash Private Ltd is into trading of cake mix. The cake mix is sold in boxes of different capacities like 200 gms, 500 gms and 1000 gms.. Whether these boxes will fall within the meaning of inventory, as per Ind AS 2, and how will they be valued?
W Limited, a company manufactures and sells towels and bedsheets using cotton, yarn, dyes and chemicals. W limited also sells cotton and intermediator product yarn occasionally in exceptional cases. Which of the following items are to be classified as inventories in books of accounts of W limited:
BB Ltd. purchases cars from several countries and sells them to Asian countries. BB Ltd. incurred many expenses during the period on such cars from their purchase to sale. Which of the following cost is allowed for inclusion in the cost of inventory?
Cash flows from operations will increase due to:
Cash flow is based upon:
An entity shall report - [[TABLE_IMG:/question-tables/q0041.png]]
An entity AK Ltd has bank balance in foreign currency aggregating to USD 100 (equivalent to Rs. 4,500) at the beginning of the year. Presuming no other transaction taking place, the entity reported a profit before tax of ₹ 100 on account of exchange gain on the bank balance in foreign currency at the end of the year. What would be the closing cash and cash equivalents as per the balance sheet?
During the financial year 20X1-20X2, ABC Limited have paid various taxes reproduced the below mentioned records for your perusal: - Capital gain tax of Rs. 2 crore on sale of office premises at a sale consideration of Rs. 100 crore. - Income Tax of Rs. 3 crore on Business profits amounting Rs. 30 crore (assume entire business profit as cash profit). - Dividend Distribution Tax of Rs. 1 crore on payment of dividend amounting Rs. 10 crore to its shareholders. - Income tax Refund of Rs. 2 crore (Refund on taxes paid in earlier periods for business profits) Calculate cashflow from investing activities.
Which of the following is not a characteristic of an entity’s cash equivalents, as defined by IND AS 7?
As per IND AS 7, for non-financial entities in the statement of cashflows, interest paid and interest and dividend received is classified as -
Which of the following is incorrect?
Under indirect cash flow method – [[TABLE_IMG:/question-tables/q0048.png]]
In the given scenario, what will be the treatment of 'other non-current liabilities' while preparing the statement of cash flows?
Where will the change in the financial asset 'Investment' be reflected in the Statement of Cash flows?
In the given scenario, what will be the treatment of 'Deferred Tax Asset' while preparing the statement of cashflows?
What is the final amount of machinery purchased during the year, to be reflected in the Statement of cash flows?
What is the opening cash and cash equivalents, in the given scenario, for the purpose of Statement of Cash flows?
What is the closing cash and cash equivalents, in the given scenario, for the purpose of Statement of Cashflows?
What is the net generated cash flow from operating activities?
What is the net cash inflow/outflow from investing activities?
What is the net cash inflow/outflow from financing activities?
What is the net cash inflow/outflow from all activities?
A company Mru Ltd made some changes in accounting policies and accounted for them in financial year 20X1-20X2. Due to changes in accounting policies, retrospective adjustment has tax effect related to previous years along with effect on the transaction. How will this be accounted for and disclosed?
Which of the following shall be considered as a change in accounting policy?
The selection and application of accounting policies for similar transactions, other events and conditions shall be:
Which of the following is treated as a change in the accounting policies in accordance with IND AS 8, Accounting Policies, Changes in Accounting Estimates and Errors?
According to IND AS 8, when a change in accounting policy is applied retrospectively, the entity shall adjust: 1. Opening balance of each affected component of equity for the earliest prior period presented. 2. Other comparative amounts disclosed for earliest prior period presented. 3. Other comparative amounts disclosed for each prior period presented. 4. Opening balance of each affected component of equity for each prior period presented. State which of the above statements are correct -
According to IND AS 8, prior period errors shall be corrected:
In some cases, it is difficult to distinguish between a change of estimate and a change in accounting policy. How should the entity treat the same?
Some new standards and amendments have been issued in the month of March 20X2, but it was effective from 1st April 20X2. In accordance with IND AS 8, what is the provision in this regard when the entity has not applied a new IND AS that has been issued but is not yet effective?
Which of the following items are examples of changes in accounting estimates? 1. A loss allowance for expected credit losses, applying IND AS 109, Financial Instruments; 2. The net realisable value of an item of inventory, applying IND AS 2 Inventories; 3. The depreciation expense for an item of property, plant and equipment, applying IND AS 16; and 4. A provision for warranty obligations, applying IND AS 37, Provisions, Contingent Liabilities and Contingent Assets
Applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied is considered as -
On 15th January, 20X2, Alpha Ltd. filed a suit against Beta Ltd. for recovery of Rs.10 lakhs. On 15th April, 20X2, the court case confirms that Beta Ltd. will have to pay the amount to Alpha Ltd. The financial statements are approved by the Board on 20th May, 20X2. What will be the treatment of Rs. 10 lakhs in the financial statements of Beta Ltd. on the reporting date i.e. 31st March, 20X2 as per IND AS 10?
A company SK Ltd took a long-term loan from bank. Before the end of the reporting date there is a breach in the terms which are material for this loan. The amount stands payable on demand by the company to bank. After the reporting date but before approval of the financial statements for issue, company entered into an agreement with the bank, pursuant to which the loan is not payable on demand. This loan will be treated as:
Event after the reporting period are those events that occur between the end of the reporting period and the date
The financial statements of Star Ltd. for financial year 20X1-20X2 were approved by the Board for issue on 24th May, 20X2. The management discovered a major fraud and decided to reopen the books of account. The financial statements were subsequently approved by the Board of Directors on 31st May, 20X2. What is date of approval for issue as per IND AS 10 in the given case?
The management of a company decided and announced a plan to discontinue the operations and liquidate the company after the reporting date. According to IND AS 10 Events after the reporting period the company shall:
On 15th April, 20X2, a major earthquake disrupted the entire operations of a reputed company. The Company suffered huge loss due to the damage caused to its factories and other business premises. The Company’s insurance policy does not cover the risk of loss arising from natural disasters. The Company does not have sufficient internal funds or the availability of external finance to rebuild the infrastructure necessary for it to resume its business operations. The Board of the company is also not sure about the future of the company. The Company has prepared the financial statements for the year ending 31st March, 20X2 which is approved in the board meeting dated 20th April, 20X2. How this event impacts the financial statement of the company?
What is the date of approval for issue of the financial statements prepared for the reporting period from 1st April, 20X1 to 31st March, 20X2, in a situation where following dates are available?
Mru Ltd having issued share capital of Rs.15,00,000 shares decided to offer two options for dividend per share- Option (i) 10 Bottles of perfume (Fair Market Value (FMV) per bottle= Rs.75) Option (ii) Dividend payment of Rs.700 The probability of shareholders selecting non-cash vis- vis cash option is estimated at 60:40. Calculate the amount at which dividend shall be initially recognised. Later on, if on date of settlement the FMV of bottle is Rs.90 and accordingly, the ratio for non-cash vis-vis cash option becomes 80:20, then how much amount shall be debited to equity?
The objective of IND AS 10 is to prescribe:
According to IND AS 10, when management of an entity is required to issue its financial statements to a supervisory board for issue, the financial statements are said to be approved when:
During the year ended 31 March 20X1, Zee Ltd has acquired 60% shares of Global. In accordance with IND AS 103 Business Combinations, goodwill arising on acquisition of subsidiary amounted to INR 20 lakh. The tax rate applicable for Zee Ltd is 30% The deferred tax liability relating to goodwill will be:
Star Ltd expects that it will earn a minimum of Rs 250 lakh per year for the anticipatable future and will be subject to 30% tax. A liability for Rs 50 lakh in respect of accrued product warranty costs has been recognised by Star Ltd. For tax purposes, the product warranty costs will be deductible when the enterprise claims or incurs the costs. In accordance with IND AS 12 Income Taxes, which of the following Star Ltd should recognise as a deferred tax asset / liability?
Entity A has calculated taxable temporary differences of Rs. 50,00,000 and deductible temporary differences of Rs. 20,00,000 on separate items. The tax rate of the current year is 35%. However, tax rate in the previous year is 30% and it is expected that in future the tax rate would be 40%. What basis should be used for measurement of deferred tax assets and liabilities?
To calculate the tax base of a liability for employee benefits, which one of the following formulas would be used? [[TABLE_IMG:/question-tables/q0082.png]]
With respect to point (a), determine the tax base of property, plant and equipment for the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0083.png]]
With respect to point (a), determine defer tax on property, plant and equipment for the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0084.png]]
With respect to point (b), determine tax base of Product Development Cost for the year 20X4- 20X5. [[TABLE_IMG:/question-tables/q0085.png]]
With respect to point (b), determine defer tax on Product Development Cost for the year 20X4- 20X5.
With respect to point (c), determine tax base of Trade Investment for the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0087.png]]
Determine the net defer tax asset / liability of Joy Ltd. For the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0089.png]]
With respect to point (a), determine tax base of Government grants for the year 20X4-20X5.
With respect point (a), determine defer tax on Government grants for the year 20X4-20X5.
With respect point (b), determine defer tax on liability for product warranty costs for the year 20X4-20X5.
With respect point (c), determine the temporary difference ,as per IND AS 12 , on account of health care benefits For employees for the year 20X4-20X5
With respect point (c), determine defer tax on Health care benefits for employee for the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0095.png]]
With respect to point (a), determine tax base of Trade Receivables for the year 20X4-20X5. [[TABLE_IMG:/question-tables/q0096.png]]
With respect point (a), determine defer tax on Trade Receivables for the year 20X4-20X5.
With respect point (b), determine defer tax on Inventories for the year 20X4-20X5.
When an asset is sold or disposed of, where is the gain or loss recognized?
Under IND AS 16, how often should the useful life of an asset be reviewed?
India Turnings Limited has adopted revaluation model, as per IND AS, since 1st April, 20X1 to measure its property, plant and equipment (PPE) and have revalued it as follows: As on 1st April, 20X1, PPE has been revalued up by ₹ 3,00,000. As on 31st March, 20X2 • PPE has been revalued down by ₹ 3,60,000 As on 31st March, 20X3 A PPE has been revalued up by ₹ 5,00,000 How will the increase in year 20X2-20X3 be recognized in the financials of India Turnings Limited?
A Limited has stopped manufacturing operations in its plant for 3 months in the year ended 31st March, 20X1. How should A limited account for depreciation relating to the 3 months in which plant was idle under IND AS 16?
When it is ______ that future economic benefits associated with an asset will flow to the entity, and the cost of the asset can be ______ measured, it should be recognized as an asset.
If one large asset has a number of individual components with different useful lives, how should this be depreciated?
Under IND AS 16, which two subsequent accounting treatments are allowed subsequently to initial recognition?
Which of these is an allowable cost of an asset for capitalisation under IND AS 16?
Devam Ltd chooses to revalue property under IND AS 16. On 31st March 20X1, their head office building is valued at 30 lakh when it is recorded in the financial statements at historical cost of 25 lakh with 4.5 lakh of accumulated depreciation charged against it. Which of the following statements is true regarding the accounting treatment of the property?
When revaluation model is used for PPE, gain on revaluation should be treated as
How should we treat maternity or paternity leaves while accruing liability for compensated absences as per actuarial valuation?
While recognizing the expenses for paid leave to employees which are carried forward to next year if unutilized. An employee can utilize such carry forward leaves anytime subject to maximum of 30 accumulated leaves. How should the Company recognize re- measurement of liability comprising the actuarial gain/loss?
From the following items, identify what must be classified as other long-term benefits under IND AS 19?
An entity has decided to improve its defined benefit pension scheme. The benefit payable will be determined by reference to 60 years of service rather than 80 years of service. As a result, the deemed benefit pension liability will increase by Rs 2 Crores. The average remaining service lives of its employees is 10 years. The Company wants to understand as to how should the increase in pension liability by Rs. 2 Crores be treated in the financial statements?
While accounting for a defined benefit obligation, there is net interest to be recognized in profit or loss. Based on the prevailing accounting practices, which of the following statement is true?
According to IND AS 20, which of the following is included in the definition of "government"?
According to IND AS 20, when should government grants be recognized by an entity?
Which IND AS provides guidance on accounting for government grants and disclosure of government assistance?
How is a grant recognized in profit or loss when it is set up as deferred income?
What is the fair value of the loan to be initially recorded in the books of A Ltd., on 1 April, 20X1?
What is the amount of grant to be recognised initially in the books of A Ltd., on 1 April, 20X1?
The government grant that becomes repayable should be accounted for as
What is the amount of finance cost to be recognised in the books for the year 20X1-20X2 and 20X2-20X3 respectively? [[TABLE_IMG:/question-tables/q0124.png]]
What is the amount that becomes repayable to the government on revocation of grant on 31 March, 20X3?
What is the balance of deferred grant income account on 31 March, 20X3, after crediting the grant income to Profit and loss account at the end of 20X2-20X3?
On refund of grant, out of grant of Rs. 25,00,000, what amount of grant income to be debited from Profit and loss account as on 31 March, 20X3? (Ignore finance cost)
What will be the total impact on profit and loss account on revocation of government grant on 31 March, 20X3? (Ignore finance cost)
Pursuant to IND AS 21, which factor will not be used in determining the entity’s functional currency?
Parent P owns 80% of the net assets of Subsidiary S. S’s functional currency is Dinar. S was acquired on 30th September, 20X1 and its net assets fair value was Dinar 40,000. P has recognised a cost of investment amounting to CU 10,675 in its financial statements. The groups accounting policy for goodwill is to recognise it on a proportionate basis. Exchange rates are as follows: 30th September, 20X1 CU 1= 6.5 Dinar 31st December, 20X2 CU 1= 6.0 Dinar Calculate the goodwill to be recognised in the consolidated statement of balance sheet as at 31st December, 20X2 under IND AS 21
Zed Ltd. imported an item of Property, plant and equipment i.e. machinery costing USD 100,000. The exchange rate as at the date of receipt of the Plant and Machinery in India was Rs.60 = 1 USD. However, at the time of remitting the payment to the foreign vendor [30 days after receipt of the Plant and machinery in India] the exchange rate was Rs.62 = 1 USD. Accordingly, ZED Ltd. passed a journal entry debiting Vendor account for Rs.60,00,000, debiting Exchange loss for Rs.2,00,000 and crediting bank account for Rs.62,00,000. At the first balance sheet date after the acquisition of the aforesaid Plant and Machinery, Zed Ltd. opted to use the Revaluation model. The accounting treatment as per IND AS 21 as regards the exchange loss of Rs.2,00,000 is as follows:
Casper Ltd is a New York based company engaged in the business of manufacturing mobile handsets. Casper’s functional currency is the dollar. Casper purchased a machine on credit from a European supplier for Euro$6 million on 31 January 2018. At this date the exchange rate was Euro$2 = $1. Casper did not settle the dues until its reporting date i.e. 31 March 20X1. At this date the closing exchange rate was Euro$1.5= $1. Casper follows cost model for measuring its non-current assets. Which one of the following statements is correct in accordance with IND AS 21- The Effects of Changes in Foreign Exchange Rates for the period ending 31 March 20X1?
XYZ Ltd., during the financial year ended 31 March 20X2, disposed of an investment in a foreign operation. Up to the date of disposal, XYZ had to translate the financial statement of the foreign operation from another currency for inclusion in its consolidated financial statements. During prior reporting periods, Rs.14,000 of exchange difference gains net of tax (pre-tax exchange difference gains Rs. 20,000) had been recognised in OCI in the consolidated financial statements of XYZ Ltd. During the year 20X2 reporting period, Rs. 3,500 exchange difference gain net of tax (pre-tax exchange difference gain Rs.5,000) up to the date of disposal of the foreign operation had been recognised in OCI. Which one of the following statements is correct in relation to the treatment of the disposal of the foreign operation in the consolidated statement of profit or loss and OCI of XYZ for the year ended 31 March 20X2?
In the context of IND AS 21, which of the following is not a monetary item?
In determining the borrowing costs to be capitalised, the amount of expenditure on a qualifying asset include only those expenditures that have resulted in
Which of the following is not a qualifying asset?
When will the specific borrowings be considered as general borrowings?
In determining the borrowing costs to be capitalised, the amount of expenditure on a qualifying asset are not reduced by
What will be the treatment of exchange difference resulting into unrealised gain while capitalising the borrowing cost on foreign currency borrowings taken for construction of a qualifying asset?
Borrowing costs do not include
In case of specific borrowings, the borrowing cost is capitalized.
Which of the following would be considered as borrowing cost to be capitalised?
SK Labs are planning to expand their business and open two more branches in the vicinity of two new hospitals being built in the area. The enterprise is using funds from their general borrowings for this expansion project. The finance director of the company has briefly read about the capitalisation of the interest paid on the borrowings. He has sought your clarification on this matter if his entity can capitalise interest of 10% which is the highest interest rate of all the borrowings they have made during the year. Which of the following are correct about the capitalisation of interest on borrowings made by a company as per IND AS 23 Borrowing Costs?
The capitalisation rate is –
Sunbeam Ltd has a 70% subsidiary Hexa Ltd and is a venturer in Texotech, a joint venture company. During the financial year to 31 March 2018, Sunbeam sold goods to both companies. Consolidated financial statements are prepared combining the financial statements of Sunbeam Ltd and Hexa Ltd. Under IND AS 24 Related Party Disclosures, in the separate financial statements of Sunbeam Ltd for the year ended 31 March 2018, disclosure is required of transactions with-
Mr. K owns all of the issued share capital of entity L. He is also a member of the key management personnel of entity M which, in turn, owns all of the issued share capital of entity N. Which of the following is true about the related party relationships from the above structure?
Era is a director of Titanic Ltd. She also owns 60% of Gracious Ltd and is a director of, but not a shareholder in, Fortuner Ltd. Era s husband is the sole shareholder in Kite Ltd. Era's daughter holds 6% of the shares in Bluebell Ltd. The only involvement she has in the company is to receive dividends. Which of the following companies would be classified under IND AS 24 Related Party Disclosures as related parties of Titanic Ltd?
A Limited has the following options with regards to its own equity shares. Which of these should be included in the calculation of diluted earnings per share?
Following information is available for A Ltd: c) 1 January - Shares in issue 1,000,000 d) Profit for the year ended 31 March Rs. 2,000,000 e) Average fair value during the period Rs.8 f) Weighted Average number of shares under options during the year = 2,00,000 g) shares Exercise price Rs.6 Calculate Diluted earnings per shares (DEPS) for the year.
Which of the following events and transaction is not mandatorily required to disclose in Interim financial statements in accordance with IND AS 34?
An entity is not required to present basic and diluted earnings per share as the components of profit or loss for an Interim Period
Income tax expense should be accrued using the *best estimate of the weighted average annual income tax rate expected for the -
IND AS 34 mandates the following in relation to interim financial reports -
According to IND AS 34, Interim Period is a Financial Reporting Period -
Which of the following is not the minimum components of an interim financial report?
An entity may reverse an impairment loss recognized in a previous interim period in respect of goodwill in the subsequent period.
An entity prepares quarterly interim financial reports in accordance with IND AS 34. The entity is engaged in sale of mobile phones and normally 5% of customers claim on their warranty. The provision in the first quarter was calculated as 5% of sales to date, which was Rs. 10 million. However, in the second quarter, a fault was found and warranty claims were expected to be 10% for the whole of the year. Sales in the second quarter were Rs. 15 million. What would be the provision charged in the second quarter’s interim financial statements?
If an entity publishes a set of condensed financial statements in its interim financial report, those condensed statements shall include, at a minimum, each of the headings and subtotals that were included in its most recent annual financial statements and the selected explanatory notes as required by this Standard.
The standard defines Interim Financial Report as a financial report for an interim period that contains a set of financial statements.
Smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets is known as
When an impairment loss occurs, the carrying amount of the asset should be reduced to its
Which of the following is not an internal indication of impairment?
__________ is considered as recoverable amount when it is not possible to measure the fair value less costs of disposal for an asset.
When a cash-generating unit has an impairment loss, the loss must be firstly applied to
Recoverable amount of an asset or cash generating unit is___________
In case of estimation of cash flows for calculating value in use, future cash flows are estimated in the currency in which they will be generated and then discounted using a discount rate appropriate for that currency. An entity translates the present value using the _______ at the date of the value in use calculation.
Which of the following is required to be tested for impairment annually irrespective of the presence of indications of impairment or not?
In measuring value in use, cash flow projections should be based on the budgets/forecasts covering a maximum period of ________unless a longer period can be justified.
Which of the following is not covered by IND AS 36, Impairment of Assets?
Which one of the following is a correct statement in relation to provisions and contingencies?
As at 31 March 20X1 (reporting date), ABC Ltd is involved in a legal dispute with one of its supplier in relation to the early termination of the exclusive license agreement between the two companies. The supplier seeks damages of Rs. 50 crore. The directors of ABC believe that, they will be successful in defending this claim. ABCs lawyers have advised that there is 90% chances that the entity would not be made liable for this claim. In accordance with IND AS 37 Provisions, Contingent Liabilities and Contingent Assets, which one of the following is the most appropriate option for ABC while preparing its financial statements for 31 March 20X1?
Which one of the following represents an appropriate discount rate for measuring a provision based on IND AS 37 Provisions, Contingent Liabilities and Contingent Assets?
As per IND AS 37 Provisions, Contingent Liabilities and Contingent Assets, where measurement uncertainty exists, which one of the following methods is NOT an appropriate valuation for a provision based on accounting standards?
With respect to valuation of goodwill and recognition of the same on acquisition of another entity. IND AS 38, Intangible assets + establishes general principles for the recognition and measurement of intangible assets in the financial statements. The standard requires any entity to recognize the intangible assets in the financial statements if and only if: 1. it is probable that the future economic benefits which are attributable to the asset will flow to the enterprise; and 2. the cost of the asset can be reliably measured Which of the following is NOT correct about the intangible assets?
Amortisation of an intangible asset ceases
AG Limited is developing a new production process. During 20X1.20X2, expenditure incurred was Rs.11 lakhs of which Rs. 8 lakhs was incurred before 1st January, 20X2 and Rs. 3 lakhs was incurred between January and March 20X2. The company is able to demonstrate that on 1st January, 20X2, the production process met the criteria for recognition as an intangible asset. The recoverable amount of the know-how embodied in the process (including future cash outflows to complete the process before it is available for use) is estimated to be Rs. 2 lakhs as at 31st March, 20X2. What is the carrying value of intangible asset at the end of the year?
AG Ltd acquired copyrights for Rs.7,50,000 on 1st April 20X1. The Management assessed the copyrights useful life at 25 years from the date of acquisition. The entity will consume the copyrights future economic benefits evenly over 25 years from the date of acquisition. The fair value of the copyright at 31st March, 20X3 is Rs. 7,00,000. The entity shall measure the carrying amount of the copyright on 31st March, 20X3 at –
BB Limited has purchased a computer with various additional software. These are integral part of the computer. Which of the following are true in the context of IND AS 38?
A newly set up dot-com entity has recently completed one of its highly publicized research and development projects. It seeks your advice on the accuracy of the following statements made by one of its stakeholders. State which one is true?
Which of the following is not covered within the scope of IND AS 38?
An intangible asset with a finite useful life should be amortised over
Which of the following items qualify as an intangible asset under IND AS 38?
At what value the reclassification or transfers between investment property and property, plant and equipment are made?
On 1st April 20X1, ABC Limited purchased a new head office building for Rs. 60 crore and on the same day leased out top 3 floors to its subsidiary on a long-term operating lease. The annual rent receivable was Rs. 2 crore starting from 31st March 20X2. On 1st April 20X1, the Directors of the Company estimated that the initial cost of the building should be allocated Rs.15 million to the top 3 floors, remainder of the building Rs. 20 million and land component Rs. 25 million. On 31st March 20X2, the property had a fair value of Rs. 64 million out of which 25% was attributable to the top 3 floors. The useful life of the building is 60 years. The carrying value of investment property in the separate/standalone financial statements of ABC Limited as at 31st March 20X2 is:
AG Limited has purchased a commercial building and let out the same to one of its subsidiaries. How it should be reflected in the consolidated financial statements?
Which of the following is an example of investment property?
Which of the following is not considered as a transfer from or to investment property?
State which of the following statements is True.
AG India Limited uses portion of building for their administrative use and let out the remainder portion. Which is not the right approach for dealing with this situation while accounting in the books of the company in accordance with IND AS 40 ?
Real Estate Limited have acquired an investment property within the meaning of IND AS 40 Investment Property. The company has details of costs and other related expenses, but it is not sure as to what would be the correct accounting treatment of the said items. Identify the correct statement.
Which of the following is an example of Investment Property ?
Which of the following characteristics distinguish investment property from owner-occupied property ?
Generally, biological assets relating to agricultural activity should be measured using
Fresho Vineyards Ltd owns a vineyard in the outskirts of Satara city in western Maharashtra. The grape vine plants and the grapes have a combined fair value of Rs. 10,00,000. The purchase cost of vine plants was Rs. 3,00,000 and the fair value of grapes on the plants is Rs. 2,40,000. The company uses the cost model to measure assets classified under IND AS 16 Property, Plant and Equipment. Which of the following options is the measurement of bearer plants and bearer fruits respectively?
Agricultural activity involves biological transformation and harvest of biological asset
Which of the following is the criteria for recognizing the biological asset in books according to IND AS 41?
Which of the following are considered as bearer plants and not to be accounted in accordance with IND AS 41?
Which of the following is not dealt with by IND AS 41 Agriculture?
Gain/Loss arising from initial recognition of a biological asset and from a change in the value of biological assets should be recognised in
Fair value less costs to sell at the point of harvest of Agricultural produce becomes or other IND AS
Which of the following combination is false regarding the definition of a biological asset and agriculture produce in IND AS 41?
A conditional government grant related to a biological asset measured at its fair value less costs to sell shall be recognised in profit or loss when and only when ______________
Under IND AS 101, what is the treatment of items that are not permitted to be recognized as assets or liabilities under IND AS?
According to IND AS 101, when should the accounting under IND AS be applied?
What is the purpose of IND AS 101?
(May’24 MTP) F Ltd. is a first-time adopter of Ind AS. The date of transition is 1st April, 20X1. On 1st April, 20X0, it obtained a 7 year US $1,00,000 loan. It has been exercising the option provided in paras 46/46A of AS 11 and has been amortising the exchange differences in respect of this loan over the balance period of such loan. On the date of transition, the company intends to continue the same accounting policy with regard to amortisation of exchange differences. State which of the following true with respect to the above transaction:
A disposal group is a group of assets
SA Ltd. acquires a subsidiary RA Ltd. exclusively with a view of selling it. The subsidiary meets the criteria to be classified as held for sale. The subsidiary remains unsold at the end of close of the year. It will be valued at -
Gain or loss on remeasurement of non-current asset classified as held for sale which does not meet the definition of discontinued operation should be included in.
The results of discontinued operation should be disclosed under.
How to measure a non-current asset (or disposal group) that ceases to be classified as held for sale?
How to present a non-current asset (or disposal group) classified as held for sale in the balance sheet?
Shubham Ltd. bought 30% share in RA Ltd. with a view of selling that investment within six months. The investment has been classified as held for sale in accordance with IND AS 105. How should the investment be treated in the financial statement of the entity?
Which of the following is not a requirement to classify an asset (or disposal group) as held for sale?
As per IND AS 105, which of the following is not allowed as a cost to sell?
Non-current asset is classified as held for sale, if it is available for_________ sale and sale is ___________
As per IND AS 108 Operating Segments, if a financial statement contains both the consolidated financial statements of a parent, as well as parent’s separate financial statements, segment information is required:
Entity A and Entity B both manufacture and distribute furniture and electrical products used in residential and commercial units. Entity A is structured such that decisions are made and performance is evaluated on a regional basis (e.g., India, Asia Pacific), whereas Entity B makes decisions and evaluates performance on a product-line basis (e.g., furniture, electrical products). How should Entity A and Entity B report operating segments as per IND AS 108, Operating Segments?
A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:
The basic rule related to inputs to valuation techniques as per IND AS 113 are
As per IND AS 113, which of the followings is not a widely used valuation technique?
The asset or liability measured at fair value shall be:
The market that maximises the amount that would be received to sell the asset or minimises the amount that would be paid to transfer the liability, after taking into account transaction costs and transport costs is called____________________
The highest and best use of a non-financial asset while measuring the fair value takes into account the use of the asset that is -
The price paid to acquire the asset or received to assume the liability is called -
Characteristics of the asset or liability are considered if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Such characteristics include:
Revisions resulting from a change in the valuation technique or its application shall be accounted for as-
The measurement requirements of IND AS 113 applies to
IND AS 115 applies to –
As per IND AS 115, an entity shall combine two or more contracts entered into at or near the same time with the same customer and account for the contracts as a single contract when
Impairment loss as per IND AS 115 shall be recognized in-
Which of the following criteria is not correct in case of identification of contract with the customer to be accounted for under IND AS 115?
An entity has entered into a contract with a customer which does not meet the criteria for identifying the contract and the entity has received consideration from the customer. In such a case the entity shall recognise the consideration as revenue only when
Where the penalty is inherent in determination of transaction price of a contract, it shall form part of
An entity shall account for a contract modification as a separate contract when
_________ is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties
Which of the following cost shall be recognises as an asset while obtaining a contract with a customer if the entity expects to recover those costs
To determine the transaction price for contracts in which a customer promises consideration in a form other than Cash, an Entity shall measure the non-cash consideration at -
An entity is required to assess whether the contract is or contains, a lease at/on -
According to IND AS 116, initial measurement of the right of use asset does not include
A lessee is required to measure the right of use asset in the financial statements initially at -
In case of a contract that contains a lease component and one or more additional lease or non- lease component, lessee is required to allocate the contract consideration to each lease component on the basis of their relative:
Lease term includes the periods covered by an extension option if exercise of that option by the lessee is –
SA Ltd. has taken a building on lease from RA Ltd. for 10 years to operate a restaurant. As per the contract, SA Ltd. has decision-making right regarding all the operations and usage of the restaurant. However, as per the contract, RA Ltd. has a right to restrict SA Ltd. from selling any kind of non-vegetarian item in the restaurant. The restriction rights of RA Ltd. will become exercisable only after 6 years. Whether the contract contains a lease?
According to IND AS 116, lease liability does not include __________
According to IND AS 116, the right of use asset in the books of Lessee shall be depreciated over the
The lease payments shall be discounted using the
An entity shall revise the lease term if there is a change in _______________
Silver Jubilee Motors granted 2,000 share options to each of its three Branch Manager on 1 April 2017, subject to the Branch Managers being in employment till 31 March 2020. The options will vest on 31 March 2020 only if the company’s share price reaches INR 14 per share at that time. The fair value of each option on 1 April 2017 is INR 10. The share price at 31 March 2018 is INR 8 and it is not anticipated that it will rise over the next two years. Further, it is anticipated on 31 March 2018 that only two Branch Managers will be in employment by 31 March 2020. Determine the value of share option to be recorded per IND AS 102 Share Based Payment in the Balance Sheet for the year ended 31 March 2018.
In respect of an entity which is a first-time adopter of IND AS, IND AS 102 would not necessarily be required to be applied to which of the following equity instruments?
On 1 April 20X1, ABC Ltd acquired an item of plant for an agreed consideration of its own 1,000 shares. The plant was received on same date and the obligation to transfer shares was to be settled on 1 May 20X1. The fair value of the item of the plant was Rs. 10,000 on 1 April 20X1. ABC Ltd.’s share price was INR 8.00 on 1 April 20X1 and INR 9.00 on 31 March 20X2. In accordance with IND AS 102 Share-based Payment, ABC Ltd should:
P Ltd acquires 95% of the issued share capital of S Ltd on 1 October 2017 by way of a share for share exchange. The profits before tax of P and S for the year ended 31 March 2018 are Rs 2,00,000 and Rs 1,50,000 respectively. How much profit before tax would be shown in the consolidated statement of profit or loss of P Ltd for the year ended 31 March 2018, in accordance with IND AS 103 'Business Combinations'?
Entity C acquires Entity D as per the principles of IND AS 103 Business Combinations. Fair Value of identifiable assets is Rs. 10,00,000. Fair Value of Liability assumed is Rs. 6,00,000. Consideration paid for the acquisition of Entity D is Rs. 5,00,000 Goodwill on acquisition is deductible for tax purposes. You need to compute the Goodwill amount to be recognised the books of Acquirer i.e. Entity C at acquisition date? (Assume tax rate @30%)
PQR Holdings Limited enters into a number of transactions each year. The accountant has requested your help to identify which of these must be accounted for as a business combination:
P owns a controlling investment of 70% of S. During the year, P sold goods to S for Rs 60,000 at cost plus 20%. At the year end, S still had half of the goods in their inventory. P’s total inventory at the year-end was Rs 120,000, and S’s total inventory was Rs 80,000. How much inventory should be recognised in Ps consolidated statement of financial position prepared in accordance with IND AS?
On 1st March 20X2, Quixote Ltd acquired 30% of the shares of Tintin Ltd. The investment was accounted for as an associate in Quixotes consolidated financial statements. Both Quixote and Tintin have an accounting year ending at 31st October 20X2. Quixote Ltd has no other investments in associates. Net profit for the year in Tintines income statement for the year ended 31st October 20X2 was Rs. 2,30,000. It declared and paid dividend of Rs.100,000 on 1st July 20X2. No other dividends were paid in the year. What amount will be shown as an inflow in respect of earnings from the associate in the consolidated cash flow statement of Alpha for the year ended 31st October 20X2?
In consolidated financial statements of PQR Ltd., non-controlling interest should be presented:
_________ are the rights designed to protect the interest of the party holding rights without giving power over the entity to which those rights relate.
A Ltd. controls another entity B Ltd., owning 60% of its ordinary share capital. At the group’s year end, 31st December 20X1, B Ltd. included Rs. 6,000 in its receivables in respect of goods supplied to A Ltd. However, the payables of A Ltd. included only Rs. 4,000 in respect of amounts due to B Ltd. The difference arose because, on 31st December 20X1, A Ltd. sent a cheque of Rs. 2,000, which was not received by B Ltd. until 3rd January 20X2. Which one of the following sets of consolidation adjustments to current assets and current liabilities is correct?
What is the share of All Limited in the post-acquisition loss of M Limited?
What is unrealised gain on inventory left unsold with M Limited?
What is the share of All Limited in the Dividend declared from M Limited?
What is the value of investment in M Limited as on 31st March 20X4 as per equity method in the consolidated financial statements of All Limited?
What is the approximate gross margin on goods sold by All Limited to M Limited? [[TABLE_IMG:/question-tables/q0272.png]]
What will be amount of purchase consideration at the acquisition date i.e. 1st April, 20X1? (Rs. in ₹000s)
Compute the amount of net assets / net worth at the acquisition date i.e. 1st April, 20X1. (Rs. in ₹000s)
What will be the amount of Goodwill at the acquisition date i.e. 1st April, 20X1? (Rs. in ₹000s)
What will be the amount of Goodwill on reporting date i.e. 31st March, 20X3? (Rs. in ₹000s)
What will the net value of Property, Plant and Equipment (after all adjustment) as on 31st March 20X3 ? (Rs. in ₹000s)
Compute value of NCI as on 31st March 20X3. (Rs. in ₹000s)
Compute Post-acquisition gain/(loss) of A Ltd. (after adjustment of impairment on goodwill) as on 31st March 20X3 (Rs. in ₹000s)
Compute the finance cost for the year 20X1-20X2 and 20X2-20X3 to be recognised in the books for the respective years. (Rs. in ₹000s)
Compute Consolidated Retained Earnings to be shown in the consolidated financial statements as on 31st March 20X3. (Rs. in ₹000s)
What will be the value of deferred consideration as on 31st March 20X3? (Rs. in ₹000s)
Compute current Liability to be shown in the consolidated balance sheet as on 31st March 20X3. (Rs. in ₹000s)
What will be the total of consolidated balance sheet as on 31st March, 20X3? (Rs. in ₹000s)
A Ltd. has invested in debentures whose interest rate is floating in nature and as per the terms of the instrument interest will be reset every month. Terms of interest is 0.5 x (MIBOR +2%). Classify the financial asset and determine the subsequent measurement for the aforesaid instrument.
From the below list of instruments held by Swan Limited as at 31.03.20X2, you need to identify the financial instrument which does not meet the contractual cash flow characteristics test as per the provisions of IND AS 109:
New Age Technology Limited has taken loan from a bank which has debt to equity ratio as one of its financial covenants. Any new fund raise could have a direct implication on the covenants of existing loans. Therefore, the CFO wants to understand which amongst the following instruments is an equity instrument as per IND AS 32 Financial Instruments: Presentation?
Which of the following categories of financial assets is NOT subject to impairment requirements of IND AS 109 "Financial Instruments"?
Entity A has issued preference shares to the investors which has similar voting rights and dividend rights and will be converted into one is to one equity shares at the time of IPO. As per the terms of the agreement, if the IPO does not happen by the end of the 7th year, then the Company will have to buy back the shares from the investors. The Company is growing very fast and is confident of going through the IPO within 3 years itself. How will the company classify the above instrument in the financial statement?
On 1 January 20X6, XYZ Ltd issues a new instrument with the following characteristics. • Face value 100, issue price 90. • Cumulative dividend payable at 5% per annum for 10 years. After 10 years, the dividend is payable at the discretion of the issuer. • The holder of the note has the option to convert to ordinary shares of XYZ Ltd. after 10 years, and conversion will be 10 ordinary shares for each instrument. • The holder can demand redemption for the face value at any time, with six months’ notice up until the end of 10 years. After 10 years, redemption is at the discretion of the issuer. • There is no fixed maturity date. How should the instrument be classified by XYZ Ltd. in the first 10 years in accordance with IND AS 32? Select which one of the following is correct.
Which principle emphasizes being straightforward and honest in professional and business relationships?
What is the primary responsibility of a Chartered Accountant in relation to pressure to breach the fundamental principles?
What should a Chartered Accountant do to comply with the principle of Professional Behavior?
What is the stance of a Chartered Accountant regarding conflicts of interest?
Which principle is violated if a conflict of interest compromises professional or business judgment?
(Nov’24 MTP) With respect to the best practices applicable to all companies, which of the following statements is incorrect?
What is the purpose of employee training in mitigating cybersecurity risks?
Which of the following statements best describes cloud computing?
How do ERP systems work?
Which of the following best describes Al?
Which of the following is NOT a benefit of automation processes?
Automation processes aid in compliance by:
(Nov’24 MTP) Which of the following proactive measures do not mitigate cybersecurity risks?
(May’24 MTP) ABC Ltd., a manufacturing entity, wants to forecast its financial performance based on various scenarios to comply with Ind AS guidelines. It took aid of Artificial Intelligence (AI), which can assist the company in generating accurate financial forecasts by analysing historical data, market trends, and relevant external factors. By leveraging machine learning algorithms, the company can simulate different scenarios, such as changes in market demand, input costs, or regulatory requirements. How will AI help the management of the company?
(May’24 MTP) X Ltd., a large multinational corporation, needs to prepare its financial statements according to Ind AS. The company has a vast amount of financial data stored in the system in various formats, including spreadsheets, PDFs, and scanned documents. Manually extracting and analysing this data is time consuming and error prone. By implementing AI-driven optical character recognition (OCR) technology, the company automates the data extraction process from diverse sources and converts it into structured formats. Which of the following problems will not be avoided by implementing AI? [[TABLE_IMG:/question-tables/q0308.png]]
What cashflow should it Ltd- report, as financing activity in the statement of cash flows?
With respect to point ii), what costs should be included in the entity's financial report for the quarter ended 30th September 20X2?
With respect to point iii), What is the tax base of the intangible asset?
Which one of the following is the appropriate classification for the annual payment of Rs. 12,000 to preference shareholders at year-end?
What is the amount of preference dividend to be reduced From profit or loss for the year for calculating Bask Earnings Per Share?
Calculate amount of goodwill / gain on bargain purchase arising upon acquisition of S ltd.
With respect to H Ltd. state whether the error should be reported in the Ind AS financial statements and how to rectify it
How many performance obligations G Ltd, has, with respect to the contract with the customer to transfer software license?
What is the amount of gain on sale of interest in subsidiary K Ltd.? [[TABLE_IMG:/question-tables/q0320.png]]
How should HSL account for the trade discount, cash discount and voucher given to customers on sale of a car?
How the long-term loan from State Bank has to be classified in the financials for the year ended 31 March 20X3 in case ABC Ltd. has not negotiated with the bank for rectification of breach?
After negotiation with State Bank, how the long-term loan has to be classified in the financials for the year ended 31 March 20X3?
Compute the value of Specialty chemical division’s Goodwill at the date of classification after re- measurement.
Calculate the closing balance of Specialty chemical division’s asset Property, Plant and Equipment at the period end.
What would be the treatment for grant of ₹ 15 million related to the construction of the factory at a cost of ₹ 60 million?
What would be the closing balance of financial instruments (as subscription of loan notes in Z Ltd.) as on 31 March 20X2?
Calculate the depreciation charge for the year ended 31 March 20X2 to be charged by G Ltd. in its books?
How should the instrument be classified by NM Ltd. In the first 10 years in accordance with Ind AS 32? Select which one of the following is correct.
Which of the following statements is correct for calculation of earnings per share of the Company for the year ended 31 March, 20X4?
At what amount the Company shall carry its investments in NM Limited in its consolidated financial statements as at 31 December 20X2?
How should the Company account for the trade discount, cash discount and voucher given to customers on sale of a car?
What would be the amount of Deferred Tax Asset or Liability that the Company should recognize as on 31 March, 20X3 on the cost incurred on the issue of equity shares during the year?
What would be carrying amount of the acquired software in the books of accounts of New Age Technology Limited as at 31 March, 20X3?
At what value should New Age Technology Limited record the high-end laptop purchased in exchange of its existing server in its books of accounts?
Determine the amount of variable consideration Building & Co. Limited should recognize in its contract with Radar Company Limited to build a manufacturing facility. [[TABLE_IMG:/question-tables/q0358.png]]
The CFO of the Company has requested you to review the interim financial statements of the third quarter ended 31 December, 20X2 to ascertain the correct net profit to be presented to the Board of Directors. What is the correct amount of profit to be reported in the interim financial statements?
Would the error of classifying certain other expenses instead of finance costs in the comparative amounts (31 March, 20X2) be considered to be correction of an error? Would the entity need to present a third balance sheet in its financial statements for the year ended 31 March, 20X3?
The CFO of the Company has requested you to evaluate whether the acquisition of Concrete Mixers Private Limited will be covered in Ind AS 103 ‘Business combinations’ or whether the under- construction plant should be accounted for as an asset acquisition? What factors will you consider in your evaluation?
If SEL issues the 2 year mandatorily convertible instruments for FC 1.0 million, assuming no transaction costs and market interest rate for similar debt instrument without conversion option is 8% per annum, on initial recognition: [[TABLE_IMG:/question-tables/q0366.png]]