CA Final · Financial Reporting · Ind AS 101 First-time Adoption of Ind AS
Ritu Retail Ltd is a first-time adopter and decides to use the transition provisions in paragraph C5 of Ind AS 115 for revenue, as permitted by Ind AS 101. How should 'date of initial application' in those provisions be read, and what else must the company apply?
The date of initial application is read as the beginning of the first Ind AS reporting period. A first-time adopter using the paragraph C5 transition provisions of Ind AS 115 must also apply paragraph C6. It is not the transition date, and paragraph C6 is not optional.
- AAs the beginning of the first Ind AS reporting period; it must also apply paragraph C6 of Ind AS 115Correct
- BAs the date of transition to Ind AS; paragraph C6 is optional
- CAs the end of the first Ind AS reporting period; no other paragraph applies
- DAs the date of incorporation; paragraph C6 must be applied only to new contracts
Explanation
Paragraph D34 of Ind AS 101 allows a first-time adopter to use the transition provisions in paragraph C5 of Ind AS 115. References to the date of initial application are interpreted as the beginning of the first Ind AS reporting period. If the company elects these provisions, it must also apply paragraph C6 of Ind AS 115. The date of transition is a common wrong reading.
Did you get it right without looking?
One question tells you little. A timed set on Ind AS 101 First-time Adoption of Ind AS shows your real accuracy, how long you take and where you lose marks.
More Ind AS 101 First-time Adoption of Ind AS questions
- Kaveri Pharma Ltd adopts Ind AS for the first time. Under previous GAAP it had recognised a deferred cost that does not qualify as an asset …
- Meghna Textiles Ltd, an Indian company, has so far prepared financial statements under the notified Accounting Standards (Indian GAAP) for i…
- Veda Textiles Ltd, an Indian company, has so far prepared its statutory financial statements under the Accounting Standards notified under t…
- Sagar Textiles Ltd, an Indian company, has always prepared its statutory financial statements under the Accounting Standards notified under …
- Veda Textiles Ltd, an Indian company, has prepared its financial statements under the notified Accounting Standards (Indian GAAP) for report…
- Vistara Foods Ltd is preparing its first Ind AS financial statements and wants to use the transition provisions of Ind AS 115 (paragraph C5)…