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

Arvind Tech Ltd adopts Ind AS for the first time. It granted equity-settled share options in earlier years. Tranche X vested before the date of transition, and the company has publicly disclosed the fair value of those options at their measurement date. Tranche Y vested before transition but was not settled, and the company elects not to apply Ind AS 102 to it. The terms of Tranche Y were modified before the date of transition. Which statement is correct under Ind AS 101?

Applying Ind AS 102 to pre-transition vested options is optional and permitted only where fair value was publicly disclosed. For grants not covered, paragraphs 44 and 45 disclosures are still required, and modifications made before transition need not follow paragraphs 26 to 29.

  1. AInd AS 102 must be applied to Tranche X and Tranche Y, as vesting before transition is irrelevant
  2. BInd AS 102 may be applied to Tranche X as fair value was disclosed publicly; for Tranche Y the company must still give the disclosures required by paragraphs 44 and 45 of Ind AS 102, and need not apply paragraphs 26-29 for the pre-transition modificationCorrect
  3. CInd AS 102 cannot be applied to Tranche X; no disclosure is needed for Tranche Y
  4. DInd AS 102 must be applied to Tranche X; for Tranche Y, modification accounting under paragraphs 26-29 is mandatory

Explanation

Applying Ind AS 102 to equity instruments vested before transition is encouraged but not required, and is allowed only if fair value was disclosed publicly at the measurement date, which holds for Tranche X. For grants where Ind AS 102 is not applied, paragraphs 44 and 45 disclosures are still required. A modification made before the date of transition does not require paragraphs 26-29 to be applied. Hence the second option is correct.

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