Page 6 - 33. FR RTP NOV. 22

government for a period of three years. The market rate of interest for similar loans for 3 years is 5% per
year.
There are no future performance conditions attached to the interest -free loan.

Discuss how to account for the above loan. Pass necessary journal entries in the entity‖s books of accounts
from year 1 to year 3, as per relevant Ind AS.

Ind AS 1

Question 4

As per the statutory requirements, exceptional items are required to be disclosed whereas Ind AS 1 requires
separate disclosures of material items and how these are to be presented in the financial statements. Does
that imply that ―exceptional‖ means ―material‖? Give examples. How should these be presented in the financial
statements?

Ind AS 12

Question 5
Following is the summarized statement of profit and loss of EARTH Limited as per Ind AS for the year ended
31st March 20X1:

Particulars Rs. in Crore
Revenue from operations 1,160.00
Other income 56.00
Total Income (A) 1,216.00
Purchase of stock-in-trade 40.00
Changes in inventories of stock-in-trade 6.00

Employee benefits expense 116.00
Finance costs 130.00
Depreciation and amortization expense 30.00
Other expenses 300.00
Total Expenses (B) 622.00
Profit Before Tax (A-B) 594.00
Current tax 165.40
Deferred tax 1.50
Tax Expenses 166.90
Profit after Tax 427.10
Additional information:
 Corporate income tax rate applicable to EARTH Limited is 30%.

 Other income includes long-term capital gains of Rs. 10 crore which are taxable at the rate of 10%.
 Other expenses include the following items which are not deductible for income tax purposes:
Item Rs. in Crore

Penalties 1.00
Impairment of goodwill 44.00
Corporate Social Responsibility expense 6.00

33.5