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CA Final · Financial Reporting · Consolidated Financial Statements

Under Ind AS 110, sub-paragraph (a) of B85L of IFRS 10 has been deleted. This paragraph deals with the exemption from consolidation for an investment entity. What reason does the Ind AS comparison give for the deletion?

The sub-paragraph was deleted because it deals with investment property measured at fair value. Ind AS 40 requires investment property to be measured at cost initially and at cost less depreciation afterwards, so that provision is not relevant in the Indian context.

  1. AIndian law does not recognise investment entities
  2. BInd AS 40 requires investment property to be measured at cost and then cost less depreciation, so the fair value requirement for investment property is not relevant in the Indian contextCorrect
  3. CInd AS 113 prohibits fair value measurement of investments
  4. DInd AS 110 requires all subsidiaries to be consolidated without exception

Explanation

IFRS 10 requires all investments to be measured at fair value for the investment entity exemption. Because Ind AS 40 uses the cost model for investment property, the sub-paragraph dealing with investment property at fair value was deleted as not relevant. The other options give reasons that do not appear in the comparison.

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