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CA Final · Financial Reporting · Consolidated Financial Statements

Ind AS 110 differs from IFRS 10 in the investment entity exemption. Which of the following correctly reflects the reason given in the official text for deleting sub-paragraph (a) of B85L in Ind AS 110?

The sub-paragraph was deleted because Ind AS 40 measures investment property at cost less depreciation rather than fair value. The deleted sub-paragraph dealt with investment property measured at fair value, which is not relevant in the Indian context. The investment entity exemption itself is not removed.

  1. AInd AS 40 requires investment property to be measured at cost less depreciation, so the sub-paragraph, which deals with investment property at fair value, is not relevant in the Indian contextCorrect
  2. BInd AS 110 does not permit any investment entity exemption
  3. CInd AS 40 requires all investment properties to be measured at fair value through profit or loss
  4. DInd AS 113 prohibits fair value measurement of investment property

Explanation

The comparison with IFRS 10 explains that Ind AS 40 requires cost initially and cost less depreciation subsequently for investment property. Hence the sub-paragraph dealing with investment property measured at fair value was deleted as irrelevant. Option C states the opposite of Ind AS 40 as described. Options B and D are not stated in the text.

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