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

Godavari Steel Ltd, an Indian subsidiary of a foreign group that reports under IFRS, has so far prepared statutory financials under notified Indian accounting standards and, for group reporting, IFRS-based packages. It now prepares its first annual financial statements under Ind AS notified under the Companies Act, 2013. Which view is correct under Ind AS 101?

Godavari Steel is a first-time adopter: its first Ind AS financial statements are its first annual statements adopting Ind AS notified under the Companies Act, 2013. Its previous GAAP is the notified Indian accounting standards used for Indian reporting, not the IFRS group packages, and it has no choice.

  1. AIts first Ind AS financial statements are the first annual financial statements in which it adopts Ind AS notified under the Companies Act, 2013, and its previous GAAP is the notified Indian accounting standards used for Indian reportingCorrect
  2. BIts previous GAAP is the IFRS basis used in the group packages, because that was used most recently
  3. CIts first Ind AS financial statements are the IFRS group packages, so it is not a first-time adopter
  4. DIts previous GAAP may be chosen by the entity between Indian standards and IFRS packages

Explanation

Ind AS 101 treats first Ind AS financial statements as the first annual financial statements adopting Ind AS notified under the Companies Act, 2013. Previous GAAP is the basis used for its reporting requirement in India immediately before adoption, so the notified Indian standards are previous GAAP. Group IFRS packages are not for Indian reporting, and the entity has no free choice.

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