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CA Final · Financial Reporting · Ind AS 105 Non-current Assets Held for Sale and Discontinued Operations

Kaveri Realty Ltd holds a commercial building accounted for under Ind AS 40 and is considering selling it. A colleague argues that, as in IFRS 5, investment property carried at fair value should be excluded from the measurement requirements of Ind AS 105. Which statement best reflects the Ind AS 105 position?

Paragraph 5(d) of IFRS 5, which deals with investment property under the fair value model, is deleted in Ind AS 105 because Ind AS 40 prohibits the fair value model. So the colleague's argument for a fair value exclusion does not apply under Ind AS.

  1. AParagraph 5(d) of IFRS 5 on the fair value model in IAS 40 is deleted in Ind AS 105 because Ind AS 40 prohibits the fair value modelCorrect
  2. BParagraph 5(d) of IFRS 5 is retained in Ind AS 105 because Ind AS 40 permits the fair value model as an option
  3. CInvestment property is entirely outside the scope of Ind AS 105 under any model
  4. DInd AS 105 permits the fair value model only for assets held for sale

Explanation

IFRS 5 paragraph 5(d) deals with non-current assets accounted for under the fair value model in IAS 40. Since Ind AS 40 prohibits the fair value model, this paragraph is deleted in Ind AS 105. The colleague's argument therefore has no basis in Ind AS.

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