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CMA Final · Corporate Financial Reporting · Impairment of Assets (Ind AS 36)

Ind AS 36 Impairment of Assets, as notified in India, differs from IAS 36 in its treatment of investment property. Which statement correctly describes the reason for the deletion of paragraph 2(f) in Ind AS 36?

Paragraph 2(f) was deleted because Ind AS 40 requires the cost model for investment property. An exclusion for investment property carried at fair value is therefore unnecessary. The paragraph number is kept only for consistency with IAS 36, and paragraph 5 was also modified.

  1. AInd AS 40 requires the cost model, so the exclusion for investment property carried at fair value is not neededCorrect
  2. BInd AS 40 requires the fair value model, so impairment testing is not needed for investment property
  3. CInvestment property is now covered by Ind AS 2 and so falls outside Ind AS 36
  4. DInvestment property is exempt from impairment testing under all Ind AS

Explanation

The comparison with IAS 36 states that paragraph 2(f) is deleted because Ind AS 40 requires the cost model. The paragraph number is retained only to stay consistent with IAS 36. Consequently paragraph 5 was modified to delete the reference to fair value measurement of investment property. The fair value option is not available in Ind AS 40, so the other options are wrong.

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