The accountant of Beryl Limited has asked you to identify the following items as Change in Accounting Policies / Change in Accounting Estimates /…

CA Intermediate · Advanced Accounting · RTP · January 2026
The accountant of Beryl Limited has asked you to identify the following items as Change in Accounting Policies / Change in Accounting Estimates / Extraordinary Items / Prior period items / Ordinary Activity: (i) Non- provision for salary already due in earlier year. (ii) Attachment of the property of the enterprise. (iii) Introduction of new pension scheme for employees. (iv) Change in Reserve for obsolete inventory. (v) Settlement of litigation case. (vi) Legislative changes having long term retrospective application. (vii) Change from Cost Molde to Revaluation Model for measurement of carrying amount of PPE. (viii) Government sanctioned grant in current year for expenses incurred in previous accounting year.

Suggested Answer and Working Notes:

(i) Prior Period item (ii) Attachment of property of enterprise is an extraordinary item. (iii) Introduction of new pension scheme for employes is not a change in accounting policy. It is an ordinary activity. (iv) Change in provision for obsolete inventory is a change in accounting estimate. (v) Litigation settlement is an ordinary activity but requires separate disclosure (vi) Extra ordinary activity requiring separate disclosure (vii) Change in Accounting policy. (viii) prior period item.

Topics: AS 5

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