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CA Final · Financial Reporting · Ind AS 12 Income Taxes

Tarang Pharma Ltd, adopting Ind AS for the first time, searches Ind AS 12 for the transitional provisions that appear in SIC 25 (Income Taxes - Changes in the Tax Status of an Entity or its Shareholders). It cannot find them. Which statement is correct?

The SIC 25 transitional provisions are not in Ind AS 12 because all Ind AS transitional provisions, where considered appropriate, have been included in Ind AS 101, First-time Adoption of Indian Accounting Standards. A first-time adopter should therefore refer to Ind AS 101.

  1. AThey were omitted by mistake and must be applied from SIC 25 directly
  2. BThey are not given in Ind AS 12, because all transitional provisions related to Ind ASs, wherever considered appropriate, are included in Ind AS 101Correct
  3. CThey are given in Ind AS 8 and apply to all changes in tax status
  4. DThey are not required for any entity because Ind AS has no transition rules

Explanation

The transitional provisions in SIC 25 have not been included in Ind AS 12. All transitional provisions related to Ind ASs, wherever considered appropriate, have been placed in Ind AS 101, First-time Adoption of Indian Accounting Standards. The entity should look there, not to SIC 25 or Ind AS 8.

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