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

Narmada Auto Ltd adopts Ind AS for the first time. It granted employee equity options that vested before the date of transition and were not applied under Ind AS 102. It also modified the terms of another grant of equity instruments, to which Ind AS 102 was not applied, before the date of transition. Which statement is correct under Ind AS 101?

Narmada Auto need not apply paragraphs 26 to 29 of Ind AS 102 to a modification made before the transition date, but it must still give the disclosures in paragraphs 44 and 45 for grants where Ind AS 102 is not applied. Retrospective application is not mandatory.

  1. AIt must apply Ind AS 102 retrospectively to all vested grants and to the modification
  2. BIt need not apply paragraphs 26-29 of Ind AS 102 to the modification, and must still disclose information required by paragraphs 44 and 45 of Ind AS 102 for grants where Ind AS 102 is not appliedCorrect
  3. CIt need not apply paragraphs 26-29 to the modification and has no disclosure obligation for those grants
  4. DIt may apply Ind AS 102 to the vested grants at its election, whether or not the fair value was disclosed publicly

Explanation

Application of Ind AS 102 to instruments vested before transition is encouraged, not required. Where it is not applied, the disclosures in paragraphs 44 and 45 are still needed. A pre-transition modification does not require paragraphs 26-29. Voluntary application is allowed only if the fair value was publicly disclosed, so the last option is wrong and the third ignores the disclosure duty.

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