CA (Final)

Financial Reporting

FR CHAPTER: IND as 2, 16,

101
MARKS- 30
Test-5
Question Paper DURATION- 50 MINS

INSTRUCTIONS:

1. All the questions are compulsory.

2. Properly mention Test no. on First Page and Page no. on
every answer sheet.
3. In case of multiple choice questions, mention option number only.
4. Working Notes are compulsory wherever required in
support of your solution.
5. Do not copy any solution from material.
6. Attempt as much as you know to fairly judge your performance.
7. Please upload your Answer Sheet Horizontally.
8. Copy once get evaluated by Evaluator cannot be re-uploaded by the
student.
9. Always check correct Test No. of your subject while uploading
answer sheet.

10. Handwriting should be clean.

LEGAL: Material provided by caexamtestseries is subject to copyright. No part of

this publication may be reproduced, distributed, or transmitted in any form or by any
means, including photocopying, recording, or other electronic or mechanical
methods, without the prior written permission of the publisher. For permission
requests, write to the publisher, addressed “Attention: Permissions Coordinator,” at
info@caexams.in. Content is continuously tracked via barcode. In any person
caught of copyright infringement, strong legal action will be taken.

WWW.CAEXAM.IN 1
 ANSWER ALL QUESTIONS

Question 1

X Ltd. has a subsidiary Y Ltd. On first time adoption of Ind AS by Y Ltd., it availed the
optional exemption of not restating its past business combinations. However, X Ltd. In
its consolidated financial statements has decided to restate all its past business
combinations. Whether the amounts recorded by subsidiary need to be adjusted while
preparing the consolidated financial statements of X Ltd. considering that X Ltd. does
not avail the business combination exemption? Will the answer be different if X Ltd.
adopts Ind AS after Y Ltd?
(4 Marks)
Question 2

Sun Ltd. has fabricated special equipment (solar power panel) during 20X1-20X2 as
per drawing and design supplied by the customer. However, due to a liquidity crunch,
the customer has requested the company for postponement in delivery schedule and
requested the company to withhold the delivery of finished goods products and
discontinue the production of balance items.
As a result of the above, the details of customer balance and the goods held by the
company as work-in-progress and finished goods as on 31.3.20X3 are as follows:
Solar power panel (WIP) Rs. 85 lakhs
Solar power panel (finished products) Rs. 55 lakhs
Sundry Debtor (solar power panel) Rs. 65 lakhs
The petition for winding up against the customer has been filed during 20X2-20X3 by
Sun Ltd. Comment with explanation on provision to be made of Rs. 205 lakh included in
Sundry Debtors, Finished goods and work-in-progress in the financial statement of
20X2-20X3.
(4 Marks)

Question 3

A Ltd. owns three properties which are shown in its financial statements as ‘Property,
Plant and Equipment’. All three properties were purchased on April 1, 20X1. The details
of purchase price and market values of the properties are given as follows: Rs. in lakhs

WWW.CAEXAM.IN 2
Property 1 and 2 are used by A Ltd. as factory building whilst property 3 is let-out to a
non-related party at a market rent. A Ltd. does not depreciate any of the properties on
the basis that the fair values are exceeding their carrying amount and recognise the
difference between purchase price and fair value in Statement of Profit and Loss.

Evaluate whether the accounting policies adopted by A Ltd. in relation to these

properties, on various accounting aspects, are in accordance with Ind AS or not. If not,
advise the correct treatment along with the workings for the same in all the cases.
(14 Marks)

Question 4

M Ltd. is setting up a new factory outside the Delhi city limits. In order to facilitate the
construction of the factory and its operations, M Ltd. is required to incur expenditure on
the construction/ development of electric-substation. Though M Ltd. incurs (or
contributes to) the expenditure on the construction/development, it will not have
ownership rights on these items and they are also available for use to other entities and
public at large. Whether M Ltd. can capitalize expenditure incurred on these items as
property, plant and equipment (PPE)? If yes, then how these items should be
depreciated and presented in the financial statements of M Ltd. as per Ind AS?
(8 Marks)

WWW.CAEXAM.IN 3