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Illustration 6

Financial Reporting

answered on 09-May-24 16:18

We have arrived the net carrying amount as 10 lakhs after deduction of impairment loss My doubt is Why are we not providing depreciation for the year as we have all the date related to residual value and remaining useful life?

latest answer

Yes.

Vijay Ramesh

CA Final

★ 765

Employee benefit

Financial Reporting

answered on 07-May-24 14:12

Video no 33 Question 21 Return on plan asset is not income of the company so why should I consider it as part P & L item

latest answer

Plan assets are owned by the company

swaminathan sundaram

CA Final

★ 110

Illustration 2

Financial Reporting

answered on 07-May-24 14:41

Illustration 2 paid 500,000 for transaction it was mentioned 2% over market price in that case 500,000 includes (100+2%) = 102 % why are we computing the 2% on paid value.

latest answer

2% of market price is transaction cost.

Vanacharla Sai Pavan Kumar

CA Final

★ 8K+

Degeneration

Financial Reporting

answered on 07-May-24 14:40

Sir, Why Degeneration is covered in AS 41 Biological transformation.

latest answer

degeneration/death is also a biological process. For some specific biological assets, after death, some value may be derived - for e.g leather.

Vanacharla Sai Pavan Kumar

CA Final

★ 8K+

Sale and Lease Back.

Financial Reporting

answered on 07-May-24 15:20

Sir, irrespective of kind of lease either operating or financing lessee (seller) has to follow the method prescribed by the sale and lease part of the standard when the transfer of asset is a sale. And also, does the buyer has a flexibility to account asset or Net investment in lease as required ?

latest answer

Even for buyer, the test will be whether control is passed or not passed.

Vanacharla Sai Pavan Kumar

CA Final

★ 8K+

Doubt Regarding Inception date

Financial Reporting

answered on 07-May-24 15:21

Sir, In the standard it has been stated that " what would be the classification at the inception had the modified terms effective from inception date". In this question we have calculated lease payments as on the modified date instead of inception date. Is this correct? and also if not since we have already received 195000 modified terms state 190,000 as lease payments which should be take and also 2 fair values has been provided as on modified date and as on inception date.

latest answer

It means - we should consider the modification date as the inception date and check.

Vanacharla Sai Pavan Kumar

CA Final

★ 8K+

Doubt regarding the example used.

Financial Reporting

answered on 07-May-24 15:22

In the example the discount rate used is IRR at which Fair value of assets is equals to lease payments and unguaranteed residual value. In the summary it was explained market rate for dealer or manufacturers and implicit rate for others?

latest answer

Some times manufacturers/dealers would quote an artifically low rate. So we use market rates for calculations

Vanacharla Sai Pavan Kumar

CA Final

★ 8K+

Illustration 31

Financial Reporting

answered on 07-May-24 15:42

Sir, In this question, First advance annual payment isn't it before commencement? Hence Rs 5,00,000 should not be considered for computing lease liability. and Payment at the beginning of the first year would be Rs 5,15,000

latest answer

First payment here is advance payment - 500000 Next year 3% increase.

Gunda Sharan

CA Final

★ 0

Is it a Financial Asset/Liability or not?

Financial Reporting

answered on 08-May-24 11:23

Seller sold a product with guarantee/warranty/100% refundable condition in case of any defect in the product. Does it become a financial liability for seller or Financial Asset for the buyer.

latest answer

Also for warranty a best estimate is considered to create a provision