Venus Ltd. is a multinational entity that owns three properties. All three properties were purchased on 1st April, 20X1. The details of purchase…

The above issue needs to be examined in the umbrella of the provisions given in Ind AS 1 ‘Presentation of Financial Statements', Ind AS 16 ‘Property, Plant and Equipment' in relation to property '1' and '2' and Ind AS 40 ‘Investment Property' in relation to property '3'. Venus Ltd. shall apply the same accounting policy (i.e. either revaluation or cost model) to entire class of property being property '1' and '2'. It also required to depreciate these properties irrespective of that, their fair value exceeds the carrying amount. The revaluation gain shall be recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus. There is no alternative of revaluation model in respect to property '3' being classified as Investment Property and only cost model is permitted for subsequent measurement. However, Venus Ltd. is required to disclose the fair value of the property in the Notes to Accounts. Also the property '3' shall be presented as separate line item as Investment Property. Therefore, as per the provisions of Ind AS 1, Ind AS 16 and Ind AS 40, the presentation of these three properties in the balance sheet is as follows: Case 1: Venus Ltd. has applied the Cost Model to an entire class of property, plant and equipment. Balance Sheet (extracts) as at 31st March, 20X2 Assets ₹ Non-Current Assets Property, Plant and Equipment Property '1' 13,500 Property '2' 9,000 22,500 Investment Properties Property '3' 10,800 Case 2: Venus Ltd. has applied the Revaluation Model to an entire class of property, plant and equipment. Balance Sheet (extracts) as at 31st March, 20X2 Assets ₹ Non-Current Assets Property, Plant and Equipment Property '1' 16,000 Property '2' 11,000 27,000 Investment Properties Property '3' 10,800 Equity and Liabilities Other Equity Revaluation Reserve Property '1' [16,000 – (15,000 – 1,500)] 2,500 Property '2' [11,000 – (10,000 – 1,000)] 2,000 4,500 The revaluation reserve should be routed through Other Comprehensive Income (subsequently not reclassified to Profit and Loss) in Statement of Profit and Loss and shown in a separate column under Statement of Changes in Equity.