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

Tarang Infra Ltd, a first-time adopter, had modified the terms of an equity-settled grant before its date of transition to Ind AS. It did not apply Ind AS 102 to this grant. Later, it elected to apply Ind AS 102 to other grants that vested before transition, whose fair value was publicly disclosed at the measurement date. Which statement is correct?

Tarang need not apply paragraphs 26 to 29 of Ind AS 102 to the modification, because the grant was not subject to Ind AS 102 and the modification occurred before the transition date. The election for other vested grants also needs public disclosure of their fair value.

  1. AFor the modified, non-Ind AS 102 grant, paragraphs 26 to 29 of Ind AS 102 need not be applied if the modification occurred before the transition dateCorrect
  2. BElection to apply Ind AS 102 to vested grants is allowed even if their fair value was never disclosed publicly
  3. CThe modification must be reversed to the original terms in the opening balance sheet
  4. DParagraphs 26 to 29 of Ind AS 102 must be applied to the modification because it affects equity

Explanation

If a first-time adopter modifies terms of a grant to which Ind AS 102 has not been applied, it is not required to apply paragraphs 26 to 29 of Ind AS 102 when the modification occurred before the transition date. Option B is wrong because the election for vested grants is permitted only if fair value was publicly disclosed at the measurement date. Options C and D are not required.

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