Page 4 - 34.1 FR MARCH 22 MTP QP

Asset 1 Asset 2 Asset 3 Asset 4 Total
Valuation Valuation Cost Cost
Rs. Rs. Rs. Rs. Rs.

Cost or revaluation 5,000 2,000 4,000 4,500 15,500
Accumulated deprecation (1,000) (500) (2,000) (1,700) (5,200)
Net book value 4,000 1,500 2,000 2,800 10,300
Revaluation surplus 2,500 500 - - 3,000
On adoption of Ind AS, its management decides that, under Ind AS, it will:
− Continue to revalue asset 1. The fair value of asset 1 at the date of transition is not materially different
from its carrying value under previous GAAP;
− Use the previous valuation of asset 2 as deemed cost, and adopt a policy of cost less depreciation under

Ind AS;
− Adopt a policy of revaluation for asset 3. The fair value of asset 3 at the entity's date of transition is Rs.
5,000;
− Continue to use a policy of cost less depreciation for asset 4.

All depreciation methods are already in accordance with those required by Ind AS 16.
Discuss the treatment under Ind AS of valuation of assets 1, 2, 3 & 4, being part of property, plant &
equipment? INDAS 101

Question 3

(a) INDAS 36 Pacific Ocean Railway Ltd. has three Cash Generating units namely Train, Railway station and
Railway tracks, the carrying amounts of which as on 31st March, 20X1 are as follows:
Cash Generating units Carrying amount Remaining useful life
(Rs. in crore)
Train 1,500 10
Railway station 2,250 20
Railway tracks 3,300 20

Pacific Ocean Railway Ltd. also has two Corporate Assets having a remaining useful life of 20 years.
(Rs. in crore)
Corporate Assets Carrying Remarks
amount
Land 1,800 The carrying amount of Land can be allocated
on a reasonable basis (i.e., pro rata basis) to
the individual cash generating units.
Buildings 600 The carrying amount of Buildings cannot be
allocated on a reasonable basis to the individual
cash-generating units.
Recoverable amount as on 31st March, 20X1 is as follows:
Cash Generating units Recoverable Amount
(Rs. in crore)
Train 1,800
Railway station 2,700

Railway tracks 4,200
Company as a whole 9,600

34.3