CA Final – Financial Reporting Test Series
CA Final - Financial Reporting
(Test on Introduction to IND AS & IND AS 16)
(FRWITHAK)
Total - 30 Marks
Time Allotted – 1 Hr
Important Points:
1. There is no use of just referring the question paper to check whether it is manageable.
Everything feels manageable until you solve it
2. Try to Complete the Question Paper within the given time limit
3. Read the question carefully and see what is asked in the question. Give Reference of IND AS
& Concept wherever you feel necessary
4. You are not required to match your answer word to word with ICAI. You can answer in your
own words alongwith keywords and appropriate working.
5. Don’t refer the solution of any question until you have completed the paper
6. Its fine if you are not able to recall few points. Solve how much you can & after test is over do
self evaluation and mark the areas which you were not able to recall.
BEST OF LUCK GUYS
#FRwithAK
#FRwithAK CA Aakash Kandoi 1
CA Final – Financial Reporting Test Series
Question 1 (5 Marks)
ABC Inc., incorporated in a foreign country has a net worth of ₹ 700 Crores. It has two subsidiaries
Company X whose net worth as on 31st March 2014 is ₹ 600 Crores and Company Y whose net worth is ₹
150 Crores. Whether Company X and Y would be required to follow Ind AS from accounting periods
commencing on or after 1st April 2016 on the basis of their own net worth or on the basis of the net worth of
ABC Inc.?
Question 2 (5 Marks)
As per the roadmap, Ind AS is applicable to Company X from the financial year 2017-18. Company X (non-
finance company) is a subsidiary of Company Y (NBFC). Company Y is an unlisted NBFC company having
net worth of ₹ 400 crores. What will be the date of applicability of Ind AS for company X and company Y? If
Ind AS applicability date for parent NBFC is different from the applicability date of corporate subsidiary,
then, how will the consolidated financial statements of parent NBFC be prepared?
Question 3 (10 Marks)
An entity has a nuclear power plant and a related decommissioning liability. The nuclear power plant
started operating on 1st April, 20X1. The plant has a useful life of 40 years. Its initial cost was ₹ 1,20,000.
This included an amount for decommissioning costs of ₹ 10,000, which represented ₹ 70,400 in estimated
cash flows payable in 40 years discounted at a risk- adjusted rate of 5 per cent. The entity’s financial year
ends on 31st March. Assume that a market-based discounted cash flow valuation of ₹ 1,15,000 is obtained
at 31st March, 20X4. This valuation is after deduction of an allowance of ₹ 11,600 for decommissioning
costs, which represents no change to the original estimate, after the unwinding of three years’ discount. On
31st March, 20X5, the entity estimates that, as a result of technological advances, the present value of the
decommissioning liability has decreased by ₹ 5,000. The entity decides that a full valuation of the asset is
needed at 31st March, 20X5, in order to ensure that the carrying amount does not differ materially from fair
value. The asset is now valued at ₹ 1,07,000, which is net of an allowance for the reduced
decommissioning obligation
How the entity will account for the above changes in decommissioning liability if it adopts revaluation
model?
Question 4 (10 Marks)
Heaven Ltd. had purchased a machinery on 1.4.2X01 for ₹ 30,00,000, which is reflected in its books at
written down value of ₹ 17,50,000 on 1.4.2X06. The company has estimated an upward revaluation of 10%
on 1.4.2X06 to arrive at the fair value of the asset. Heaven Ltd. availed the option given by Ind AS of
transferring some of the surplus as the asset is used by an enterprise.
On 1.4.2X08, the machinery was revalued downward by 15% and the company also re- estimated the
machinery’s remaining life to be 8 years. On 31.3.2X10 the machinery was sold for ₹ 9,35,000. The
company charges depreciation on straight line method.
Prepare machinery account in the books of Heaven Ltd. over its useful life to record the above transactions.
#FRwithAK CA Aakash Kandoi 2
