Page 2 - 29. COMPILER QB - IND AS 10

IND AS 10 – EVENTS AFTER THE REPORTING

PERIOD

(TOTAL NO. OF QUESTIONS – 7)

INDEX

S.No. Particulars Page No.

1 RTP Questions 29.1
2 MTP Questions 29.5
3 Past Exam Questions 29.7

RTPs QUESTIONS

Q1 (RTP May 18)
Mac Ltd. purchased goods on credit from Toy Ltd. for Rs 580 lakhs for export. The export order was cancelled.
Mac Ltd. decided to sell the same goods in the local market with a price discount. Toy Ltd. was requested to

offer a price discount of Rs 10%. Toy Ltd. wants to adjust the sales figure to the extent of the discount
requested by Mac Ltd. Discuss whether such a treatment in the books of Toy Ltd. is justified as per the
provisions of the relevant Ind AS.
Also, Toy Ltd. entered into a sale deed for its Land on 15th March, 20X1. But registration was done with the
registrar on 20th April, 20X1. But before registration, is it possible to recognize the sale and the gain at the

balance sheet date? Give reasons in support of your answer.
SOLUTION

Toy Ltd. had sold goods to Mac Ltd on credit worth for Rs. 580 lakhs and the sale was completed in all
respects. Mac Ltd.'s decision to sell the same in the domestic market at a discount does not affect the
amount recorded as sales by Toy Ltd.
The price discount of 10% offered by Toy Ltd. after request of Mac Ltd. was not in the nature of a discount
given during the ordinary course of trade because otherwise the same would have been given at the time of
sale itself. However, there appears to be an uncertainty relating to the collectability of the debt, which has

arisen subsequent to sale. Therefore, it would be appropriate to make a separate provision to reflect the
uncertainty relating to collectability rather than to adjust the amount of revenue originally recorded. Hence
such discount should be charged to the Statement of Profit and Loss and not shown as deduction from the
sales figure.

With respect to sale of land, both sale and gain on sale of land earned by Toy Ltd. shall be recognized in the
books at the balance sheet date. In substance, the land was transferred with significant risk & rewards of
ownership to the buyer before the balance sheet date and what was pending was merely a formality to

29. 1