Page 3 - 27. COMPILER QB - IND AS 7

Considering the above, for the financial year ended March 31, 20X2 total consideration of Rs. 15,00,000 less
Rs. 250,000 will be shown under investing activities as “Acquisition of the subsidiary (net of cash acquired)”.
There will not be any impact of issuance of equity shares as consideration in the cash flow statement however

a proper disclosure shall be given elsewhere in the financial statements in a way that provides all the relevant
information about the issuance of equity shares for non-cash consideration.
Further, in the statement of cash flows for the year ended March 31, 20X3, cash consideration paid for the
acquisition of additional 10% stake in Company B will be shown under financing activities.

Q2 (May 19)
Z Ltd. has no foreign currency cash flow for the year 2017. It holds some deposits in a bank in the USA. The

balances as on 31.12.2017 and 31.12.2018 were US$ 100,000 and US$ 102,000 respectively. The exchange rate on
December 31, 2017 was US$1 = Rs 45. The same on 31.12.2018 was US$1 = Rs 50. The increase in the balance
was on account of interest credited on 31.12.2018. Thus, the deposit was reported at Rs 45,00,000 in the
balance sheet as on December 31, 2017. It was reported at Rs 51,00,000 in the balance sheet as on 31.12.2018.
How these transactions should be presented in cash flow for the year ended 31.12.2018 as per Ind AS 7?

SOLUTION
The profit and loss account was credited by Rs. 1,00,000 (US$ 2000 × Rs. 50) towards interest income. It was

credited by the exchange difference of US$ 100,000 × (Rs. 50 - Rs. 45) that is, Rs. 500,000. In preparing the
cash flow statement, Rs 500,000, the exchange difference, should be deducted from the ―net profit before
taxes and extraordinary item‖. However, in order to reconcile the opening balance of the cash and cash
equivalents with its closing balance, the exchange difference Rs. 500,000, should be added to the opening
balance in note to cash flow statement.
Cash flows arising from transactions in a foreign currency shall be recorded in Z Ltd.‖s functional currency by

applying to the foreign currency amount the exchange rate between the functional currency and the foreign
currency at the date of the cash flow.

Q3 (Nov 19)

Following is the balance sheet of Kuber Limited for the year ended 31stMarch,20X2
(Rs. In lacs)
20X2 20X1

ASSETS
Non-current Assets
Property, plant and equipment 13,000 12,500
Intangible assets 50 30
Other financial assets 145 170
Deferred tax asset (net) 855 750
Other non-current assets 800 770
Total non-current assets 14,850 14,220
Current assets
Financial assets
Investments 2,300 2,500
Cash and cash equivalents 220 460

27. 2