Note: We encourage you to attempt this with complete conscience within a 60 minutes time frame. Please feel free to refer to the ICAI Material and TowardsCA study notes before attempting the same. You can e-mail your answers to towardsca@gmail.com for verification.
Direct Questions:
- Define Indian Accounting Standards (Ind AS) and explain their significance in financial reporting in India.
- Discuss the benefits of convergence with International Financial Reporting Standards (IFRS) and its impact on financial reporting practices in India.
Practical Numerical Questions:
- ABC Ltd. is a manufacturing company that follows Indian Accounting Standards (Ind AS). The company purchased a new machinery worth INR 10,00,000 on January 1, 2023. The expected useful life of the machinery is 5 years with no residual value. The company uses the straight-line depreciation method. Calculate the depreciation expense for the year 2023 and the carrying amount of the machinery at the end of the year.
- XYZ Ltd. is a listed company that recently adopted Ind AS for its financial reporting. As per Ind AS 16 – Property, Plant and Equipment, the company revalued its land and buildings as of December 31, 2022. The carrying amount of land and buildings before the revaluation was INR 5,00,00,000. The fair value of the land and buildings after revaluation is INR 6,00,00,000. Calculate the revaluation gain and record the necessary journal entry.
- PQR Ltd. is a software development company that follows Ind AS for its financial reporting. During the financial year 2022-23, the company capitalized development costs amounting to INR 50,00,000 related to a new software product. The estimated economic life of the software is 3 years. Calculate the amortization expense for the year 2022-23 and the carrying amount of the software at the end of the year.