Page 2 - 1. COMPILER QB - INDAS 1
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INDAS – 1

               PRESENTATION OF FINANCIAL STATEMENTS &

                       ANALYSIS OF FINANCIAL STATEMENTS




                                          (TOTAL NO. OF QUESTIONS – 12)


                                                         INDEX

                               S.No.                 Particulars                  Page No.

                                 1                  RTP Questions                    1.1

                                2                  MTP Questions                     1.18

                                3               Past Exam Questions                 1.23
                                4          Newly Added Questions by ICAI            1.30



                                                  RTPs QUESTIONS

        Q1 (MAY 18)

        Company A has taken a long-term loan arrangement from Company B. In the month of December 20X1, there

        has been a breach of material provision of the arrangement. As a consequence of which the loan becomes

        payable on demand on March 31, 20X2. In the month of May 20X2, the Company started negotiation with
        the Company B for not to demand payment as a consequence of the breach. The financial statements were
        approved for the issue in the month of June 20X2. In the month of July 20X2, both companies agreed that

        the payment will not be demanded immediately as a consequence of breach of material provision.

        Advise on the classification of the liability as current / non –current.
        Solution
        As per para 74 of Ind AS 1 “Presentation of Financial Statements” where there is a breach of a material

        provision of a long-term loan arrangement on or before the end of the reporting period with the effect that

        the liability becomes payable on demand on the reporting date, the entity does not classify the liability as
        current, if the lender agreed, after the reporting period and before the approval of the financial statements for

        issue, not to demand payment as a consequence of the breach.
        In the given case, Company B (the lender) agreed for not to demand payment but only after the financial

        statements were approved for issuance. The financial statements were approved for issuance in the month of
        June  20X2  and  both  companies  agreed  for  not  to  demand  payment  in  the  month  of  July  20X2  although

        negotiation  started  in  the  month  of  May  20x2  but  could  not  agree  before  June  20X2  when  financial
        statements were approved for issuance.

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