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Question Paper - InD As 103 & 12

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218 views7 pages

Question Paper - InD As 103 & 12

Uploaded by

pratikdubey9586
Copyright
© © All Rights Reserved
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CA Final - Financial Reporting

Question Paper
(Test on IND AS 103 & IND AS 12)
(FRWITHAK)
Total Marks – 50 Marks

Date: 24/05/2021

Time: 10am to 12pm

QUESTION 1 – 14 MARKS – 30 MINUTES

Test Designed by CA Aakash Kandoi


Test Designed by CA Aakash Kandoi
QUESTION 2 – 4 MARKS – 10 MINUTES

Test Designed by CA Aakash Kandoi


Question 3 – 16 Marks – 35 Minutes

Test Designed by CA Aakash Kandoi


Question 4 - 6 Marks – 12 Minutes

i) On 31st October 20X1, K Ltd received ₹ 2,00,000 from a customer. This payment was in
respect of services to be provided by K Ltd from 1st November 20X1 to 31st July 20X2. K
Ltd recognised revenue of ₹ 1,20,000 in respect of this transaction in the year ended 31st
March 20X2 and will recognise the remainder in the year ended 31st March 20X3. Under
the tax jurisdiction in which K Ltd operates, ₹ 2,00,000 received on 31st October 20X1 was
included in the taxable profits of K Ltd for the year ended 31st March 20X2.

Explain and show how the tax consequences (current and deferred) of the three
transactions would be reported in its statement of profit or loss and other comprehensive
income for the year ended 31st March 20X2. Assume tax rate to be 25%.

ii) Just before 31st March, 2018, X Ltd. committed itself to closing a division after the year
end, making a number of employees redundant. Therefore X Ltd. recognised a provision
for closure costs of ₹ 20,00,000 in its statement of financial position as at 31st March,
2018. Income-tax Act allows tax deductions for closure costs only when the closure
actually takes place.

Explain and show how each of these events would affect the deferred tax assets / liabilities
in the consolidated balance sheet of X Ltd. group at 31 March, 2018 as per Ind AS. Assume
the rate of corporate income tax is 20%.

iii) During the year ended 31 March 2017, X Ltd. capitalised development costs which
satisfied the criteria in paragraph 57 of Ind AS 38 ‘Intangible Assets’. The total amount
capitalised was ₹ 16,00,000. The development project began to generate economic
benefits for X Ltd. from 1st January 2018. The directors of X Ltd. estimated that the project
would generate economic benefits for five years from that date. The development
expenditure was fully deductible against taxable profits for the year ended 31 March
2018.

Explain and show how each of these events would affect the deferred tax assets / liabilities
in the consolidated balance sheet of X Ltd. group at 31 March, 2018 as per Ind AS. Assume
the rate of corporate income tax is 20%.

Test Designed by CA Aakash Kandoi


Question 5 – 4 Marks – 8 Minutes

A’s Ltd. profit before tax according to Ind AS for Year 20X1-20X2 is ₹ 100 thousand and taxable profit
for year 20X1-20X2 is ₹ 104 thousand. The difference between these amounts arose as follows:

1. On 1st February, 20X2, it acquired a machine for ₹ 120 thousand. Depreciation is charged on
the machine on a monthly basis for accounting purpose. Under the tax law, the machine will
be depreciated for 6 months. The machine’s useful life is 10 years according to Ind AS as well
as for tax purposes.

2. In the year 20X1-20X2, expenses of ₹ 8 thousand were incurred for charitable donations.
These are not deductible for tax purposes.

Prepare necessary entries as at 31st March 20X2, taking current and deferred tax into account. The
tax rate is 25%. Also prepare the tax reconciliation in absolute numbers as well as the tax rate
reconciliation.

Test Designed by CA Aakash Kandoi


Question 6 - 6 Marks – 12 Minutes

The Company measures its head office property using the revaluation model. The property is
revalued every year as on 31st March. On 31st March, 2016, the carrying value of the property (after
revaluation) was Rs. 40 crores whereas its tax base was Rs. 22 crores. During the year ended 31st
March, 2017, the Company charged depreciation in its Statement of Profit and Loss of Rs. 2 crores
and claimed a tax deduction for tax depreciation of Rs. 1.25 crores. On 31st March, 2017, the property
was revalued to Rs.45 crores. As per the tax laws, the revaluation of Property, Plant & Equipment
does not affect taxable income at the time of revaluation.

The Company has no other temporary differences other than those indicated above. The Company
wants you to compute the deferred tax liability as on 31st March, 2017 and the charge/credit to the
Statement of Profit and Loss and/or Other Comprehensive Income for the same. Consider the tax
rate at 20%.

Test Designed by CA Aakash Kandoi

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