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CMA Final · Corporate Financial Reporting · Impairment of Assets (Ind AS 36)

Which of the following statements about the deletion of paragraph 2(f) in Ind AS 36, as explained in the comparison with IAS 36, is correct?

Paragraph 2(f) is deleted in Ind AS 36 because Ind AS 40 requires the cost model for investment property. The paragraph number is nevertheless retained so that the numbering stays consistent with IAS 36, and paragraph 5 is modified to drop the reference to fair value measurement of investment property.

  1. AIt is deleted because Ind AS 40 requires the cost model for investment property, and the paragraph number is retained for consistency with IAS 36Correct
  2. BIt is deleted because investment property is never tested for impairment under Ind AS
  3. CIt is deleted because Ind AS 40 permits the fair value model, so impairment is not relevant
  4. DIt is deleted and all subsequent paragraphs of Ind AS 36 have been renumbered

Explanation

The comparison with IAS 36 states that paragraph 2(f) is deleted as Ind AS 40 requires the cost model, and the paragraph number is retained to maintain consistency with IAS 36. The option claiming fair value model is wrong because Ind AS 40 requires the cost model. Renumbering is also wrong since numbers are retained.

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