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CA Final · Financial Reporting · Ind AS 38 Intangible Assets

Ganga Toll Infra Ltd. adopted Ind AS for the first time. It had recognised intangible assets from service concession arrangements for toll roads in its financial statements for the period immediately before the first Ind AS reporting period, and it opts for the exception in paragraph D22 of Appendix D to Ind AS 101 to amortise them. How does Ind AS 38 deal with such an entity, per the comparison with IAS 38?

Ind AS 38 includes an inserted paragraph 7AA that scopes out an entity opting to amortise toll road service concession intangibles recognised before the first Ind AS period, under the paragraph D22 exception in Ind AS 101. Ganga is therefore outside Ind AS 38 for those assets.

  1. AInd AS 38 applies fully, with no scope exclusion
  2. BParagraph 7AA is inserted in Ind AS 38 to scope out the entity that opts to amortise such toll road intangibles as per that exceptionCorrect
  3. CInd AS 38 is amended so that toll road intangibles are always treated as indefinite life assets
  4. DParagraphs 129 to 130J of Ind AS 38 give the transitional rules for this election

Explanation

The comparison with IAS 38 states paragraph 7AA was inserted to scope out an entity opting to amortise toll road service concession intangibles under the Ind AS 101 D22 exception. Option D is wrong because transitional provisions were not included in Ind AS 38 but placed in Ind AS 101.

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