Page 23 - 33. FR RTP NOV. 22

3. Interest and dividend received on Investing activities Investing activities
investments in subsidiaries, associates and
in other entities

4. Dividend paid on preference and equity Financing activities Financing activities
shares, including tax on dividend paid on
preference and equity shares by other
entities
5. Finance charges paid by lessee under Financing activities Financing activities
finance lease
6. Payment towards reduction of outstanding Financing activities Financing activities
finance lease liability
7. Interest paid to vendor for acquiring fixed Financing activities Financing activities
asset under deferred payment basis
8. Principal sum payment under deferred Investing activities Investing activities
payment basis for acquisition of fixed
assets
9. Penal interest received from customers for Operating Activities Operating Activities
late payments
10. Penal interest paid to suppliers for Operating Activities Operating Activities
late payments
11. Interest paid on delayed tax payments Operating Activities Operating Activities
12. Interest received on tax refunds Operating Activities Operating Activities

Solution 12
For determination of amortisation of the intangible asset, which has finite useful life, two elements need to

be determined: useful life and residual value.
Useful life is defined as:
(a) the period over which an asset is expected to be available for use by an entity; or
(b) the number of production or similar units expected to be obtained from the asset by an entity.
In the instant case, since the entity expects that the asset will be available for use by it for the period of 5
years and thereafter it will be transferred, the useful life of the asset is 5 years.

For residual value, paragraphs 100-102 of Ind AS 38 states that the residual value of an intangible asset with
a finite useful life shall be assumed to be zero unless:
(a) there is a commitment by a third party to purchase the asset at the end of its useful life; or
(b) there is an active market (as defined in Ind AS 113) for the asset and:
(i) residual value can be determined by reference to that market; and

(ii) it is probable that such a market will exist at the end of the asset‖s useful life.
The depreciable amount of an asset with a finite useful life is determined after deducting its residual value. A
residual value other than zero implies that an entity expects to dispose of the intangible asset before the end
of its economic life.
An estimate of an asset‖s residual value is based on the amount recoverable from disposal using prices

prevailing at the date of the estimate for the sale of a similar asset that has reached the end of its useful
life and has operated under conditions similar to those in which the asset will be used.
On application of above paragraphs, the depreciable amount of the patent will be determined after deducting

33.22