Page 2 - 13. COMPILER QB - INDAS 37

INDAS 37 – PROVISIONS, CONTINGENT

LIABILITIES & ASSETS

(TOTAL NO. OF QUESTIONS – 8)

INDEX

S.No. Particulars Page No.

1 RTP Questions 13.1

2 MTP Questions 13.6

3 Newly Added Questions by ICAI 13.8

RTPs QUESTIONS

Q1 (Nov. 18)
U Ltd. is a large conglomerate with a number of subsidiaries. It is preparing consolidated financial statements

as on 31st March 2018 as per the notified Ind AS. The financial statements are due to be authorised for issue
on 15th May 2018. It is seeking your assistance for some transactions that have taken place in some of its
subsidiaries during the year.
G Ltd. is a wholly owned subsidiary of U Ltd. engaged in management consultancy services. On 31st January
2018, the board of directors of U Ltd. decided to discontinue the business of G Ltd. from 30th April 2018.

They made a public announcement of their decision on 15th February 2018.
G Ltd. does not have many assets or liabilities and it is estimated that the outstanding trade receivables and
payables would be settled by 31st May 2018. U Ltd. would collect any amounts still owed by G Ltd‖s
customers after 31st May 2018. They have offered the employees of G Ltd. termination payments or
alternative employment opportunities.
Following are some of the details relating to G Ltd.:

⮚ On the date of public announcement, it is estimated by G Ltd. that it would have to pay 540 lakhs as
termination payments to employees and the costs for relocation of employees who would remain with the
Group would be Rs. 60 lakhs. The actual termination payments totalling to Rs520 lakhs were made in full
on 15th May 2018. As per latest estimates made on 15th May 2018, the total relocation cost is RS63 lakhs.

⮚ G Ltd. had taken a property on operating lease, which was expiring on 31st March 2022. The present value
of the future lease rentals (using an appropriate discount rate) is Rs430 lakhs. On 15th May 2018, G Ltd.
made a payment to the lessor of Rs410 lakhs in return for early termination of the lease.
The loss after tax of G Ltd. for the year ended 31st March 2018 was Rs400 lakhs. G Ltd. made further
operating losses totalingRs60 lakhs till 30th April 2018.
How should U Ltd. present the decision to discontinue the business of G Ltd. in its consolidated statement of

comprehensive income as per Ind AS?
13.1