Financial Reporting - Nov 2022 RTP

20X1, Nuogen Ltd. had granted 1,20,000 share options to its employees with the vesting condition being a service condition as follows: Vesting date : 31 st March 20X2 - 80,000 share options (1-year vesting period since grant date) Vesting date : 31 st March 20X5 - 40,000 share options (4-year vesting period since grant date) Each option can be converted into one equity share of Nuogen Ltd. The fair value of the options on grant date, i.e., on 1 st…

A company manufactures specialised machinery. The company offers customers the choice of either buying or leasing the machinery. A customer chooses to lease the machinery. Details of the arrangement are as follows: (i) The lease commences on 1 st April, 20X1 and lasts for three years. (ii) The lessee is required to make three annual rentals payable in arrears of ` 57,500. (iii) The leased machinery is returned to the lessor at the end of the lease. (iv) The fair…

To encourage entities to expand their operations in a specified development zone, the government provides interest-free loans to fund the purchase of manufacturing equipment. In accordance with the development scheme, an entity receives an interest -free loan of ` 5,00,000 from the government for a period of three years. The market rate of interest for similar loans for 3 years is 5% per year. There are no future performance conditions attached to the interest -free loan. Discuss how to account…

As per the statutory requirements, exceptional items are required to be disclosed whereas Ind AS 1 requires separate disclosures of material items and how these are to be presented in the financial statements. Does that imply that ‘exceptional’ means ‘material’? Give examples. How should these be presented in the financial statements? Ind AS 12

Following is the summarized statement of profit and loss of EARTH Limited as per Ind AS for the year ended 31 st March 20X1: Particulars ` in Crore Revenue from operations 1,160.00 Other income 56.00 Total Income (A) 1,216.00 Purchase of stock-in-trade 40.00 Changes in inventories of stock-in-trade 6.00 Employee benefits expense 116.00 Finance costs 130.00 Depreciation and amortization expense 30. PAPER – 1 : FINANCIAL REPORTING 7 Other expenses 300.00 Total Expenses (B) 622.00 Profit Before Tax (A-B) 594.00…

PQR Ltd. is preparing its interim financial statements for quarter 3 of the year. How the following transactions and events should be dealt with while preparing its interim financials: (i) It makes employer contributions to government-sponsored insurance funds that are assessed on an annual basis. During Quarter 1 and Quarter 2 larger amount of payments for this contribution were made, while during the Quarter 3 minor payments were made (since contribution is made upto a certain maximum level of earnings…

ABC Ltd. is in the business of manufacturing an apple beverage and requires large quantity of apples to manufacture such beverage. In order to satisfy its requirement of apples, it enters into 3 years lease contracts with owners of apple orchards. The lea se contracts are mainly of two types: (1) Contract 1: The owner of the apple orchard (i.e. the lessor) raises the apple trees to produce apples. ABC Ltd. (i.e. lessee) makes a fixed annual payment to the…

Harish Construction Company is constructing a huge building project consisting of four phases. It is expected that the full building will be constructed over several years but Phase I and Phase II of the building will be operational as soon as they are completed. PAPER – 1 : FINANCIAL REPORTING 9 Following is the detail of the work done on different phases of the building during the current year: (` in lakh) Phase I Phase II Phase III Phase IV…