Page 7 - 34.1 FR MARCH 22 MTP QP

Share capital 2,000 500
Retained earnings 1,400 300
3,400 800
Non-current liabilities 3,000 400
Current liabilities 1,250 650
7,650 1,850

Further information:
(i) On the date of acquisition the fair values of S Limited's plant exceeded its book value by Rs. 2,00,000.
The plant had a remaining useful life of five years at this date;
(ii) The consolidated goodwill has been impaired by Rs. 2,58,000; and
(iii) The A Limited Group, values the non-controlling interest using the fair value method. At the date of

acquisition, the fair value of the 20% non-controlling interest was Rs. 3,80,000.
You are required to prepare Consolidated Balance Sheet of A Limited as at 31 st March, 20X3. (Notes to
Account on Consolidated Balance Sheet is not required). (INDAS 103)

(b) M Limited had constructed another factory few years ago with the assistance of yet another government
grant, 'Innovative Product'. The grant is non-repayable and, following the construction of the factory,
cannot be clawed back by the government. There are no further conditions attached to the grant that the

Company is required to satisfy. The grant received has been treated as deferred income and is being
credited to the income statement over the same period as the factory is being depreciated. Following an
adverse change in the demand of the product the factory manufactures, during the year at the reporting
date, the directors have concluded that the factory's carrying value is no longer recoverable in full and
that a write down for impairment is required. The write down is more than covered by the amortized

deferred income balance related to the grant.
Discuss, in the context of Ind AS framework and Ind AS 20, the impairment of the factory for which
'Innovative Product' government grant, has been received. Would your answer be different, if there are further
conditions attached to grant beyond construction of factory?

Question 6

(a) Wheel Co. Limited borrowed Rs. 50,00,00,000 from a bank on 1st April, 20X1. The original terms of the
loan were as follows:
● Interest rate: 11%
● Repayment of principal in 5 equal instalments
● Payment of interest annually on accrual basis

● Upfront processing fee: Rs. 58,70,096
● Effective interest rate on loan: 11.50%
On 31st March, 20X3, Wheel Co. Limited approached the bank citing liquidity issues in meeting the cash flows

required for immediate instalments and re-negotiated the terms of the loan with banks as follows:
● Interest rate 15%

● Repayment of outstanding principal in 10 equal instalments starting 31 st March, 20X4
● Payment of interest on an annual basis

34.6