Page 3 - 35. FR APRIL 22 MTP QP ANSWERS
P. 3
from Year 7 to Year 14). Lessee’s incremental borrowing rate at the beginning of Year 7 is 7% p.a.
How should the said modification be accounted for? Pass the journal entry for the said modification. (INDAS
116)
Question 2
(a) On 1st April, 20X1, an entity purchased an office block (building) for Rs. 50,00,000 and paid a non-
refundable property transfer tax and direct legal cost of Rs. 2,50,000 and Rs. 50,000 respectively while
acquiring the building.
During 20X1, the entity redeveloped the building into two-story building. Expenditures on re- development
were:
Rs. 1,00,000 on Building plan approval;
Rs. 10,00,000 on construction costs (including Rs. 60,000 refundable purchase taxes); and
Rs. 40,000 was due to abnormal wastage of material and labour.
When the re-development of the building was completed on 1st October, 20X1, the entity rents out Ground
Floor of the building to its subsidiary under an operating lease in return for rental payment. The subsidiary
uses the building as a retail outlet for its products. The entity kept first floor for its own administration and
maintenance staff usage. Equal value can be attributed to each floor.
How will the entity account for all the above mentioned expenses in the books of account as on 1st October,
20X1?
Also, discuss how the above building will be shown in the consolidated financial statements of the entity as a
group and in its separate financial statements as per relevant Ind AS. (INDAS 16)
(b) (i) Can a Not-for-Profit organisation do the Integrated Reporting as per the Framework?
(ii) Can an Integrated reporting be done in compliance to the requirements of the local laws to prepare a
management commentary or other reports?
(c) INDAS 108 X Ltd. is operating in coating industry. Its business segments comprise Coating (consisting of
decorative, automotive, industrial paints and related activities) and Others (consisting of chemicals,
polymers and related activities). Certain information for financial year 20X1-20X2 is given below:
(Rs. in lakh)
Segments External GST Other Result Assets Liabilities
Revenue operating
(including Income
GST)
Coating 2,00,000 5,000 40,000 10,000 50,000 30,000
Others 70,000 3,000 15,000 4,000 30,000 10,000
Additional information:
1. Unallocated income net of expenses is Rs. 30,00,00,000
2. Interest and bank charges is Rs. 20,00,00,000
3. Income tax expenses is Rs. 20,00,00,000 (current tax Rs. 19,50,00,000 and deferred tax Rs. 50,00,000)
4. Unallocated Investments are Rs. 1,00,00,00,000 and other assets are Rs. 1,00,00,00,000.
5. Unallocated liabilities, Reserves and surplus and share capital are Rs. 2,00,00,00,000, Rs. 3,00,00,00,000 &
Rs. 1,00,00,00,000 respectively.
35. 2
