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CA Final · Financial Reporting · Ind AS 101 First-time Adoption of Ind AS

Arjun Motors Ltd adopts Ind AS for the first time. Its financial year ends 31 March, and its first Ind AS reporting period begins 1 April 2025. It chooses the D34 exemption on revenue. Which statement is correct?

Arjun Motors may apply the Ind AS 115 transition provisions in paragraph C5, treating the date of initial application as the beginning of its first Ind AS reporting period. If it does so, it must also apply paragraph C6.

  1. AIt may apply the Ind AS 115 transition provisions in paragraph C5, reading 'date of initial application' as the beginning of the first Ind AS reporting period, and must then also apply paragraph C6Correct
  2. BIt may apply paragraph C5 with the date of initial application being the transition date, and need not apply paragraph C6
  3. CIt must apply Ind AS 115 retrospectively with no transition relief
  4. DIt may apply paragraph C5 only if the entity is not a first-time adopter

Explanation

The exemption lets a first-time adopter use the Ind AS 115 transition provisions in C5, interpreting 'date of initial application' as the beginning of the first Ind AS reporting period. If it uses them, it must also apply paragraph C6. The option stating the transition date is wrong because the reference point is the start of the first Ind AS reporting period, and dropping C6 is not allowed.

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