Dr. CA Ravi Agarwal's CA Final FR Compiler 6.

0 Score 70+ in FR

Paper 1 – Financial Reporting

Dr. CA Ravi Agarwal's CA Final Audit Compiler 6.0

equity;
(ii) non-controlling interests which would have been earlier classified outside
equity; and
(c) apply Ind ASs in measuring all recognised assets and liabilities:
(i) discounting of long-term provisions
(ii) measurement of deferred income taxes for all temporary differences instead
of timing differences.

Question 9
Mathur India Private Limited has to present its first financials under Ind AS
for the year ended 31st March, 20X3. The transition date is 1st April, 20X1.
The following adjustments were made upon transition to Ind AS:
(a) The Company opted to fair value its land as on the date on transition.
The fair value of the land as on 1st April, 20X1 was Rs. 10 crores. The
carrying amount as on 1st April, 20X1 under the existing GAAP was Rs.
4.5 crores.
(b) The Company has recognised a provision for proposed dividend of Rs. 60
lacs and related dividend distribution tax of Rs. 18 lacs during
the year ended 31st March, 20X1. It was written back as on opening
balance sheet date.
(c) The Company fair values its investments in equity shares on the date of
transition. The increase on account of fair valuation of shares is Rs. 75
lacs.
(d) The Company has an Equity Share Capital of Rs. 80 crores and Redeemable
Preference Share Capital of Rs. 25 crores.
(e) The reserves and surplus as on 1st April, 20X1 before transition to Ind AS
was Rs. 95 crores representing Rs. 40 crores of general reserve and Rs. 5
crores of capital reserve acquired out of business combination and balance
is surplus in the Retained Earnings.
(f) The company identified that the preference shares were in nature of
financial liabilities.
What is the balance of total equity (Equity and other equity) as on 1st April, 20X1
after transition to Ind AS? Show reconciliation between total equity as per AS
(Accounting Standards) and as per Ind AS to be presented in the opening
balance sheet as on 1st April, 20X1. Ignore deferred tax impact. (RTP Nov ’19)
(MTP 8 Marks Sep ‘23)
Answer 9
Computation of balance total equity as on 1st April, 20X1 after transition to
Ind AS
Rs. in
crore
Share capital- Equity share Capital 80
Other Equity
General Reserve 40
Capital Reserve 5
1331

Retained Earnings (95-5-40) 50

Add: Increase in value of land (10-4.5) 5.5
Add: De recognition of proposed dividend (0.6 + 0.78
Page

0.18)

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