IND AS 1
Who is required to comply with IND AS 1?
a) Only listed companies in India
b) Unlisted companies with a net worth of Rs. 100 crore or more
c) Companies in India that are listed on the stock exchange and unlisted companies with a net worth of Rs. 500 crore or more
d) All companies in India
c) Companies in India that are listed on the stock exchange and unlisted companies with a net worth of Rs. 500 crore or m
Should "Abnormal Waste" be capitalized into inventory?
NO
Under IND AS 113, does fair value depend on the company’s intention to sell the asset?
No
An item of PPE can be carried under the revaluation model even if its fair value cannot be measured reliably.
Ans. No
1. Land held for an undetermined future use qualifies as investment property.
Yes
When did IND AS 1 become effective?
a) April 1, 2015
b) April 1, 2016
c) April 1, 2017
d) April 1, 2018
a) April 1, 2015
Which of the following methods of inventory valuation is not allowed under IND AS 2?
A. First-In, First-Out (FIFO)
B. Last-In, First-Out (LIFO)
C. Weighted Average Cost (WAC)
D. Specific Identification
D. Specific Identification
Which of the following best describes fair value under IND AS 113?
A. The cost at which the asset was originally purchased
B. The amount the company plans to sell the asset for
C. The price received to sell an asset in the market at the measurement date
D. The insured value of the asset
C. The price received to sell an asset in the market at the measurement date
Depreciation shall cease when the asset is classified as held for sale.
Ans. Yes
Property under construction intended to be used as investment property is covered under IND AS 40.
No
What is the requirement for the presentation of earnings per share under IND AS 1?
a) It should be presented as a separate line item in the balance sheet
b) It should be disclosed in the notes to the financial statement
b) It should be disclosed in the notes to the financial statement
Which of the following costs is explicitly excluded from the cost of inventory under Ind AS 2?
a) Costs of purchase
b) Abnormal amounts of wasted materials
c) Costs of conversion
d) Production overheads
b) Abnormal amounts of wasted materials
Under IND AS 113, fair value of a liability should be measured based on:
A. Settlement value agreed with the lender
B. Amount the entity expects to pay to extinguish the liability
C. Price that would be paid to transfer the liability in an orderly transaction at the measurement date
D. Historical cost of the liability
C. Price that would be paid to transfer the liability in an orderly transaction at the measurement date
Which of the following expenditures incurred after acquisition of PPE should be capitalised?
a) Day-to-day servicing cost
b) Repairs to maintain existing performance
c) Major inspection cost that meets recognition criteria
d) Administrative overheads
c) Major inspection cost that meets recognition criteria
An investment property is derecognised on __________ or when no __________ economic benefits are expected from its use or disposal.
Hint: Removed when sold or no benefits in Future
disposal; future
While preparing financial statements, a company decides not to disclose a particular accounting policy because management feels the amount involved is very small and will not influence users’ decisions.
According to IND AS 1, what should the company do?
A. Not disclose it, because immaterial items need not be disclosed
B. Disclose all accounting policies regardless of materiality
C. Disclose only if auditors demand it
D. Disclose the accounting policy only when a loss occurs
Not disclose it, because immaterial items need not be disclosed
Which of the following items is NOT treated as inventory under IND AS 2?
A. Raw materials held for production
B. Finished goods ready for sale
C. Spare parts used regularly in manufacturing process
D. Machinery spare part expected to be used for more than one year
D. Machinery spare part expected to be used for more than one year
A company wants to measure the fair value of an asset. The quoted market selling price is ₹2,50,000.
However, the company will incur ₹15,000 as brokerage and legal fees if it sells the asset.
At what amount should the asset be measured at fair value?
A. ₹2,35,000
B. ₹2,50,000
C. ₹2,65,000
D. ₹2,15,000
B. ₹2,50,000
1. Under IND AS 16, PPE is recognised as an asset only when it is probable that __________ benefits will flow to the entity and the __________ of the asset can be measured reliably.
Hint: Assets which gives benefits later and its price is known
future economic; cost
. A company owns land on which it plans to construct a factory in the next two years. Until then, the land is vacant.
How should the land be classified?
The land should be classified as Investment Property since it is held for undetermined future use, which implies capital appreciation.
Which of the following items must be presented as a separate line item in the Statement of Profit and Loss, rather than being tucked away in the notes or "Other Expenses"?
A) Research and development costs incurred during the period.
B) Impairment losses (including reversals) on financial instruments.
C) Gains or losses arising from the translation of foreign operations.
D) Total advertising and promotional expenditure for the year.
B) Impairment losses (including reversals) on financial instruments.
What should an entity disclose in its financial statements under IND AS 2?
A. Accounting policies, carrying amount of inventory, and net realizable value
B. Accounting policies, carrying amount of inventory, and replacement cost
C. Accounting policies, carrying amount of inventory, and gross profit margin
D. Accounting policies, carrying amount of inventory, and selling price of inventory
A. Accounting policies, carrying amount of inventory, and net realizable value
A company wants to measure the fair value of an asset. The asset can be sold in two markets:
Market A: Selling price ₹1,00,000, transaction cost ₹5,000
Market B: Selling price ₹96,000, transaction cost ₹1,000
According to IND AS 113, what amount should be taken as fair value?
A. ₹95,000
B. ₹1,00,000
C. ₹96,000
D. ₹99,000
B. ₹1,00,000
An entity uses the revaluation model for a class of PPE. Which of the following is NOT permitted?
a) Revaluing only selected assets within the class
b) Crediting revaluation increase to OCI
c) Revaluing assets when fair value can be measured reliably
d) Charging depreciation on revalued amount
a) Revaluing only selected assets within the class
A company owns a building:
● 60% is leased out to tenants
● 40% is used as a corporate office
The portions cannot be sold separately.
How should the property be classified
The entire property should be classified as Property, Plant and Equipment (IND AS 16), not as investment property.