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CA Final · Financial Reporting · Ind AS 38 Intangible Assets

Nilgiri Tollways Ltd opted under the Ind AS 101 exception to continue amortising toll road service concession intangibles recognised in the financial statements for the period ending immediately before its first Ind AS reporting period. How does Ind AS 38 deal with those intangibles?

Paragraph 7AA scopes out of Ind AS 38 the entity that opts to amortise toll road service concession intangibles under the Ind AS 101 Appendix D paragraph D22 exception. Such an entity therefore does not apply Ind AS 38 to those assets.

  1. AParagraph 7AA scopes them out of Ind AS 38 for the entity that so optsCorrect
  2. BThey must be restated under Ind AS 38 using the revaluation model
  3. CThey must be treated as having an indefinite useful life
  4. DThey must be derecognised on transition to Ind AS

Explanation

Paragraph 7AA was inserted to scope out the entity that opts to amortise intangible assets arising from service concession arrangements in respect of toll roads, as per the exception in paragraph D22 of Appendix D to Ind AS 101. The other options wrongly bring the assets within Ind AS 38 measurement or treat them as indefinite-lived.

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