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PG - 252
3
lil Semester tr/!.Com. Examination, Apr!l/May Z}EZ
(CBC$) (Semesrer $eheme)
(2021 - 22 Onwards)
COMMERCE
3.3 : Corporate Reporting practices - I
Time : 3 Hours Max. I\4arks : 70
SECTION * A
1. Answer any seven out of ten. Each question carries two marks. (7x2=14)
a) What do you mean by Accounting Standard ?
b) Expand IASB.
c) What is the meaning of adjusting events ?
d) Give the meaning of market approach as per IND AS 11g.
e) What is equity settled share based payment transactions as per IND AS 102 ?
0 What is meafit 6y Cessation o{ capitalization ?
g) What is intanEible asset ?
h) what do you understand by repurchase agreement as per IND AS 11s ?
i) Who are market parlicipants ?
j) X Limited purchased a land worth of Fs. 1,00,00,000. lt has option either
to pay full amount at the time of purchases or pay for it over two years for a
total cost of Rs. 1,20,00,000. What should be the cost of the building under
both the payments method ?
SECTION _ B
Answer any four questions out of six. Each question carries five rnarks. (4xS=20)
2. Define the term 'Accounting Standards'. What is its importance in financial
reporting ?
P.T.O.
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3" Brielly explain the objectives to prepare financial statements.
4. M Ltd. has a treasury department that arranges funds for all the requirements
of the company including funds for working capital and expansion programs.
During the year ended March 2022, the company commenced the construction
of a qualifying asset and incurred the following expenses :
Date Amount (Rs.)
June 1,2021 3,00,000
November 1,2021 3,20,000
The details of borrowings and interest thereon are as under :
Particulars Average Balance (Rs.) Interest (Rs.)
Long term loan @ 8% 11,00,000 1,20,000
Working capital loan 6,00,000 70,000
Total 17,00,000 1,90,000
Compute the borrowing costs that should he capitalized as per IND AS 23.
5. The company deals in four products P, Q, R, S, which are neither similar nor
interchangeable. At the time of closing of its account for the year 2011-22.
The historical cost and net realizable value of the items of closing stock are
determined as follows :
Items Historical Cost Net Realisable value
{Rs. in lakhs) (Hs. in lakhs)
P 48 29
'39
o 41
6n
R JO 36
4.)
s E-L 32
What will be the value of Ctrosing stock ?
Briefly explain the applicability of IND AS 115, recognition and .identifying
performance obligation.
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7. M $sfar Powcr Ltd., a psr'rer company, l'tas a present obligation to dismantle
its plant after 25 years of useful life- M Solar Power Ltd. cannot cancel this
obligation or transfer to third parry. M Solar Power Ltd. has estimated the total cost
of dismantling at Fls. 40,00,000, the present value of which is Rs. 25,00,000.
Based on the facts and circumstances, [Vl Solar Power Ltd. considers the
risk factor of 5/" i.e., the risk that the actual outflows would be more from
the expected present value. How should X Solar Power Ltd. account for the
obligation ?
SECTION -C
Answer any two questions out of four. Each question carries twelve marks. (2x12=241
8. "lFRSs are developed through an international due process that involves
accountants, financial analysts and other regulatory bodies." Discuss.
L Dream Limited acquired a patent at a cost of 198 lakh for a period of six years
and the product life cycle is also six years. The company capitalized the cost
and starteO amdrtizing at 33 lakh per annum. After three years, it was found
that the product life-cycle may continue for another 5 years from then. The net
cash flows from the product during these five years are expected to be 86 !akh,
138 lakh, 1 14 lakh, 108 lakh and 98 lakh respectively. You are required to find
out amortization cost of the patent for each of the years, as per IND AS 38.
I
10. On 1"t April, 2020, an item of property ts offered for sale at Fls. 30 million,
with payment #rms being three equal installments of Rs. 10,00,000 over a
two-year period (payments are made on 1't April, 2A2A 31ut March, 2021 and
31't March,2022).lmplicit intelest rate of 4.86 percent p.a.
Show how the property will be recorded in accordance of IND AS 16.
11. Write a short note on the following :
a) Financial accounting standards board
b) Accounting concepts and conventions.
c) Share based payment as per IND AS 102.
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SECTION _ D
Answer ihe foilowinE :
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12. Company X, a manufacturer of specialized construction equipment enters into
a contract with customer Y to manufacture and deliver a customized Boom lift
tor Fls. 1,00,000. The total cost to company X of designing, manufacturing and
delivering the boom lift is estimated to be Rs. 80,000. Two days, company X
enters into another contract with customer Y to deliver five boom lift tyres that
ct"lstorner Y will use on the customized boorn lift in the future after the original
tyres deteriorate. The contract price per tyre is Rs. 900, however the cost of
each tyre is estirnated at Rs. 970. Whether these two contracts should be
tneated as a single contract as per IND AS 115.
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