Page 6 - 30. COMPILER QB - IND AS 101

(b) The Company has recognised a provision for proposed dividend of Rs. 60 lacs and related dividend
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distribution tax of Rs. 18 lacs during the year ended 31 March, 20X1. It was written back as the opening
balance sheet date.

(c) The Company fair values its investments in equity shares on the date of transition. The increase on
account of fair valuation of shares is Rs. 75 lacs.
(d) The Company has an Equity Share Capital of Rs. 80 crores and Redeemable Preference Share Capital of
Rs. 25 crores.
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(e) The reserves and surplus as on 1 April, 20X1 before transition to Ind AS was Rs. 95 crores representing
Rs. 40 crores of general reserve and Rs. 5 crores of capital reserve acquired out of business combination
and balance is surplus in the Retained Earnings.
(f) The company identified that the preference shares were in the nature of financial liabilities.
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What is the balance of total equity (Equity and other equity) as on 1 April, 20X1 after transition to Ind
AS? Show reconciliation between total equity as per AS (Accounting Standards) and as per Ind AS to be
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presented in the opening balance sheet as on 1 April,20X1.
Ignore deferred tax impact.
SOLUTION

Computation of balance total equity as on 1stApril, 20X1 after transition to Ind AS
Rs in crore
Share capital- Equity share Capital 80
Other Equity
General Reserve 40

Capital Reserve 5
Retained Earnings (95-5-40) 50
Add: Increase in value of land (10-4.5) 5.5
Add: De recognition of proposed dividend (0.6 + 0.18) 0.78
Add: Increase in value of Investment 0.75 57.03 102.03
Balance total equity as on 1stApril, 20X1 after transition 182.03
to Ind AS
Reconciliation between Total Equity as per AS and Ind AS to be presented in the opening balance sheet as on

1stApril, 20X1
Rs in crore
Equity share capital 80
Redeemable Preference share capital 25
105

Reserves and Surplus 95
Total Equity as per AS 200
Adjustment due to reclassification
Preference share capital classified as financial liability (25)
Adjustment due to derecognition
Proposed Dividend not considered as liability 0.78
as on 1stApril20X1
Adjustment due to remeasurement

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