SPK Ltd has transitioned to Ind as for the first time in the FY 22-23, the company is in the process of preparing the financial statements under Ind as and the company has outstanding bank over draft. The company has been classifying the same under financing activity prior to Ind As adoption. The same treatment of classifying the bank over draft under financing activity is carried by SPK ltd in the preparation of Ind as financial statements.

ABC ltd is a manufacturing company and it has invested in 20 year deep discount bonds at Rs. 2,26,200 having face value of Rs. 6,00,000. The effective interest rate of the bond is 5%. At 20th year the company received Rs. 6,00,000 and it is unaware on how to treat this amount in the cash flow statement.

CJP ltd is a pharma based company which has wholly a owned subsidiary named ASK ltd. CJP ltd has sold 26% of it`s holdings in the open market. How should the sale of 26% holdings should be treated in the cash flow statement as per Ind as - 7.

RP rental solutions private limited is engaged in the business of renting home appliances to its customers. The company has paid Rs.2 crores for acquiring the 200 washing machines, 100 Televisions and 100 Air conditioners and these assets are also purchased for the purpose of rentals and will be sold in the ordinary course of business. The company has classifed Rs. 2 crores as investing activity.

Baba Ltd acquired a building for its administrative purpose and presented the same as PPE in the Financial year 2017-18. During the Financial year 2022-23, it relocated the office to a new building and leased the acquired building to the third party. Following change in the usage, Baba Ltd reclassified the building from PPE to investment property. The auditor of Baba ltd argued that this should be accounted as change in accounting policy as per Ind As 8.

DU ltd is engaged in the business of manufacturing and have been using Machine hours rate of depreciation till date, However now the management has decided to charge depreciation on WDV basis. The management of DU ltd is unaware about the accounting treatment for this change.

ADC ltd is a company which is engaged in the business of construction. The company has voluntarily adopted to Ind As -115 using the transition guidance. The company was earlier recognising the revenue as per Ind as -18 and now the auditor argued that this change should be treated as a voluntary change in accounting policy as per Ind as -8.

The Board of directors of K Ltd approved the financial statements for the reporting period FY 22-23 on 15th June 2023. The management of K Ltd discovered a major fraud and has decided to reopen the books of accounts. The financial statements were subsequently approved by the board of directors on 30th June 2023. What is the date of approval for issue as per Ind As 10.

XYZ Ltd. has completed the construction of a building (a qualifying asset) but is not permitted to use it until certain safety approvals are obtained as per the government regulations. Should capitalisation of borrowing costs be continued when the qualifying asset has been constructed and is ready for use but is not permitted to be used until safety approvals are obtained?

S Ltd. financed the construction of a qualifying asset with an intercompany loan taken from its parent company P Ltd. with an interest rate of 7% p.a. P Ltd. in-turn has obtained the said loan from a Bank at the same rate of interest of 7% p.a. for the specific purpose of providing it to S Ltd. Since, the qualifying asset is in the subsidiary company and the borrowings in the parent company, how is this treated in the separate financial statements of both entities as per Ind AS 23

Z Ltd. issued preference shares that are mandatorily redeemable at premium in 10 years to raise funds of Rs. 10,00,000 for the purpose of obtaining a qualifying asset. It carries compulsory cumulative 10 per cent dividend payments to be made annually. Provided that 10 per cent is the market rate of return for this similar type of instrument when issued. Z Ltd. has assumed a contractual obligation to make a future stream of 10 per cent payments in return. Whether Z Ltd. can capitalise dividend payable to preference shareholders as borrowing costs as per Ind AS 23?

KS Ltd has created 3 provisions for the year ended FY 22-23. 1. Provision for warranty obligation 2. Provision for guarantee on account of the loan taken by its subsidiary named SK Ltd . 3. Accrued Interest payable on borrowings. Whether the company`s treatment for the above-mentioned transactions in line with Ind as -37.

AD Ltd is an automobile component manufacturer. The automobile manufacturer has specified a delivery schedule and non adherence will entail a penalty. The penalty clause is variable based on the actual delivery date. As on March 31, 2023, the reporting date, the manufacturer has a delivery scheduled for June 2024. However the manufacturer is aware that he will not be able to meet the delivery schedule in June 2024. Determine whether the entity has a present obligation as at March 31, 2023 or March 31,2024 requiring recognition of provision.

An entity has entered into a contract to purchase specific quantity of coal at the rate of Rs. 50 per unit over a period of three years. The contract is not cancellable without payment of compensation. The current market price of coal is Rs. 45 per unit. The coal is purchased for consumption during the manufacturing process, the output of which is sold in the market at a loss. Is the contract an onerous contract and creation of provision is required under Ind As -37?

IOC ltd is engaged in the business of extracting oils from the mid seas, for this purpose it has placed a rig in the mid sea. There is a government regulation, where by at the end of the contract period the company has to restore the sea to the original condition.

C ltd is a company engaged in providing management consultancy services and it holds 100 bundles of A4 Sheets and other consumables which are expected to be consumed in the course of providing services to its clients. Whether the above mentioned items can be treated on par with inventories .

CA ltd is transitioning to Ind As in the financial year 22-23, It has been existing for past 50 years, now there are restatements that should be made for presenting its first time Ind As balance sheet, there are significant changes in accounting policies for hedge instruments and equity valuations which requires huge amount of spending but without any benefits and hence CA ltd needs immediate remedy for the same.

Vijay Ltd is engaged in 2 businesses. real estate and manufacture of passenger vehicles. With respect to the real estate business, the entity constructs residential apartments for customers and the normal operating cycle is three to four years. With respect to the business of manufacture of passenger vehicles, normal operating cycle is 19 months. The management of vijay ltd has been classifying all the liablities and assets of the company based on the operating cycle of real estate.

Maurya Ltd has provided the related party transactions disclosures in the Board`s report and argued that the same need not be disclosed in the financial statements, as it is already available in the Board`s report and hence it wil lead to duplication. Identify the correct option.

M Ltd. entered into a contract with a ship builder company S Ltd and ordered it to construct 3 ships for its fleet on April 1, 2022. The terms of the contract are commercially negotiated as per which M Ltd. makes a down payment of 25% of the contract value of each of the ship. The balance amount is to be paid at the time of delivery. The contract also specifies that the construction activity for all the three ships should be completed by not later than financial year 2026. On March 1, 2023, the ship builder informs that planning and designing activity (being substantive activities) for the said ships is in progress but, construction activity has not commenced for any of the three ships. M Ltd. pays the down payment out of long-term borrowings taken from a scheduled bank and is incurring borrowing costs on the same. Is it permissible for M Ltd. to capitalise borrowing costs for the financial year ended March 31, 2023 or March 31, 2024?

H Ltd. incurs borrowing costs for the purpose of construction of a qualifying asset for its own use. The construction gets completed on May 31, 2022. However, decoration work is under process which is expected to be completed by November 2022 after which H Ltd. will be able to start using the said asset for its own use. H Ltd. wants to capitalise the eligible borrowing costs incurred up to November 2022.

Harsh Ltd. uses its own cash resources to finance the construction of a qualifying asset. It did not borrow any funds. Management of Harsh Ltd. is of the view that interest that could have been earned on the cash that has been used for the qualifying asset represents forgone benefit and could be capitalised as Borrowing costs as per Ind AS 23? Whether the contention of the management is correct?

The company has an PPE which has been recognised under cost model orignially and now it intends to change the same to revaluation model, and it has originally recognised De-commissioning cost as one of its component. As a result of change from cost to revaluation model, there is also a significant change in De-commissioning costs. The company has treated both the changes as change in accounting policy.

ACA Ltd. prepared interim financial report for the quarter ending June 30, 2023. The interim financial report was approved for issue by the Board of Directors on July 15, 2023. ACA ltd has disputed with Income tax department and it is pending in High court for the past 5 years, and now based on the recent supreme court ruling which is similar to the company`s facts and case, the company is virtually certain to receive Rs.500 crores as refund. Whether this event occurring between end of the interim financial report and date of approval by Board of Directors, i.e., events between July 1, 2023 and July 15, 2023 that provide evidence of conditions that existed at the end of the interim reporting period shall be adjusted in the interim financial report ending June 30, 2023? Identify the correct accounting treatment.