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

Rohini Pharma Ltd adopts Ind AS for the first time. Before the transition date, it modified the terms of a grant of equity instruments to which Ind AS 102 has not been applied. Under the Ind AS 101 exemption, what is the position on that modification?

Rohini Pharma is not required to apply paragraphs 26 to 29 of Ind AS 102 to the modification, because it occurred before the date of transition and Ind AS 102 was not applied to that grant. No reversal or fair value test applies.

  1. AIt must apply paragraphs 26 to 29 of Ind AS 102 to the modification
  2. BIt is not required to apply paragraphs 26 to 29 of Ind AS 102 if the modification occurred before the date of transition to Ind ASCorrect
  3. CIt is exempt only if the modification reduced the fair value of the grant
  4. DIt must reverse the modification and account for the original terms

Explanation

The exemption says that where Ind AS 102 has not been applied to a grant, the entity need not apply paragraphs 26 to 29 to a modification that happened before the transition date. The exemption does not depend on whether fair value rose or fell, so option C is wrong.

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