CA Final - Financial Reporting (IND AS) - Test Paper
Question 1: IND AS 2 - Inventories
A company has the following inventory details at the year-end:
Cost of inventory: Rs. 12,00,000
Net realizable value (NRV): Rs. 10,50,000
Selling expenses incurred on sale: Rs. 80,000
Required: (a) Calculate the value of inventory as per IND AS 2. (b) What will be the
impact if NRV recovers to Rs. 12,50,000 in the next accounting period?
Question 2: IND AS 16 - Property, Plant and Equipment
ABC Ltd. purchased machinery on 1st April 2020 for Rs. 50,00,000. The estimated useful
life is 10 years with a residual value of Rs. 5,00,000. The company follows the straight-
line method of depreciation.
On 1st April 2023, due to technological advancements, the company reassesses the
useful life to 6 years (from the date of purchase) and estimates the revised residual
value to be Rs. 3,00,000.
Required: (a) Compute the depreciation charge for the financial year 2023-24. (b) Pass
necessary journal entries for the change in estimate.
Question 3: IND AS 20 - Accounting for Government Grants
XYZ Ltd. received a government grant of Rs. 5,00,000 on 1st April 2022 for the purchase
of a machine costing Rs. 20,00,000. The machine has a useful life of 5 years with no
residual value. The grant was received with the condition that the company must use
the machine for 5 years.
Required: (a) Explain the accounting treatment of the grant as per IND AS 20. (b)
Calculate the impact of the grant on the depreciation charge.
Question 4: IND AS 23 - Borrowing Costs
DEF Ltd. started constructing a factory building on 1st July 2022. The following loans
were outstanding during the year:
Loan A: Rs. 50,00,000 @ 10% p.a. (taken specifically for construction on 1st July
2022)
Loan B: Rs. 30,00,000 @ 12% p.a. (general borrowing)
Loan C: Rs. 20,00,000 @ 11% p.a. (general borrowing)
Construction was completed on 31st March 2023, and the total cost incurred was Rs.
80,00,000.
Required: Compute the amount of borrowing costs to be capitalized as per IND AS 23.
Question 5: IND AS 36 - Impairment of Assets
PQR Ltd. has an asset with a carrying amount of Rs. 15,00,000. The recoverable amount
based on fair value less cost of disposal is Rs. 12,00,000, and its value in use is Rs.
13,00,000.
Required: Determine whether the asset is impaired and calculate the impairment loss.
Question 6: IND AS 38 - Intangible Assets
A company developed software internally, incurring the following costs:
Research phase costs: Rs. 2,00,000
Development phase costs: Rs. 8,00,000
Testing and maintenance: Rs. 1,00,000
Required: (a) Identify which costs can be capitalized as per IND AS 38. (b) How should
the software be subsequently measured?
Question 7: IND AS 40 - Investment Property
ABC Ltd. purchased a building for Rs. 40,00,000 and classified it as investment property.
The company follows the cost model for valuation. The building has a useful life of 20
years with no residual value.
On 31st March 2024, the fair value of the building is Rs. 45,00,000.
Required: (a) How should the investment property be accounted for on 31st March
2024? (b) What disclosures are required as per IND AS 40?
Question 8: IND AS 41 - Agriculture
A farmer owns a plantation of mango trees. The trees take 4 years to mature. The fair
value of the plantation is as follows:
Year 1: Rs. 2,00,000
Year 2: Rs. 3,50,000
Year 3: Rs. 5,00,000
Year 4: Rs. 6,50,000
Required: (a) Explain the accounting treatment of biological assets as per IND AS 41. (b)
Calculate the gain to be recognized in profit or loss each year.
Question 9: IND AS 105 - Non-Current Assets Held for Sale
XYZ Ltd. decided to sell a machine on 31st December 2023. The machine had a carrying
amount of Rs. 10,00,000, and its fair value less cost to sell was Rs. 8,50,000.
Required: (a) How should the asset be classified as per IND AS 105? (b) What will be the
impact on financial statements for the year ended 31st March 2024?
