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CA Final · Financial Reporting · Financial Instruments: Scope and Definitions

Sagar Pharma Ltd, an employer, has a defined benefit gratuity plan. It also holds quoted bonds in its own treasury portfolio, and has a lessee lease liability under Ind AS 116. Which of these is NOT excluded from Ind AS 109 in its entirety?

The quoted bonds are the item not excluded. They are ordinary financial assets fully within Ind AS 109. Employer obligations under Ind AS 19 plans are excluded, and lease liabilities are excluded except for the derecognition requirements.

  1. AQuoted bonds held in the treasury portfolioCorrect
  2. BEmployer's rights and obligations under the gratuity plan
  3. CThe lessee's lease liability, as regards its derecognition requirements
  4. DBoth the gratuity obligations and the lease liability for all purposes

Explanation

Employers' rights and obligations under Ind AS 19 plans are excluded. Lease rights and obligations are excluded, except that lease liabilities are subject to the Standard's derecognition requirements. The question asks what is not entirely excluded; quoted bonds are ordinary financial assets fully within scope. Option 3 is wrong because the lease liability is partly covered, and the gratuity is wholly excluded.

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