Skip to content

CA Final · Financial Reporting · Ind AS 12 Income Taxes

Bharat Realty Ltd holds a building as investment property under Ind AS 40. Ind AS 40 does not permit the fair value model, and Ind AS 12 was modified for this. Which statement correctly describes the consequence for Ind AS 12?

Since Ind AS 40 does not allow the fair value model, Ind AS 12 deletes paragraphs 51C-51D and modifies paragraphs 20 and 51E. Both the deletion and the consequential modifications apply, so the retained-paragraph or deletion-only views are incorrect.

  1. AParagraphs 51C-51D of IAS 12 are retained, and paragraphs 20 and 51E are unchanged
  2. BParagraphs 51C-51D have been deleted and paragraphs 20 and 51E have been modifiedCorrect
  3. COnly paragraph 68 has been modified, and paragraphs 51C-51D are retained
  4. DParagraphs 51C-51D have been deleted but no other paragraph has been modified

Explanation

Because the fair value model is not allowed in Ind AS 40, paragraphs 51C-51D were deleted and paragraphs 20 and 51E were modified. Option four is wrong since it ignores the consequential modifications to paragraphs 20 and 51E.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 12 Income Taxes shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 12 Income TaxesFree diagnostic mock

More Ind AS 12 Income Taxes questions