M/s XYZ & Co. is an auditing firm. During his audit, the firm is facing difficulty in accounting of the following transaction for which, it…

M/s XYZ & Co. is an auditing firm. During his audit, the firm is facing difficulty in accounting of the following transaction for which, it seeks your answer: (i) A Ltd. has established a defined benefit pension plan for its eligible employees. The balance sheet of A Ltd. at 31 st March, 20X7 currently includes the estimated net liability at 31 st March, 20X6 amounting - 18.75 crore. The following matters relate to the plan for the year ended 31 st March, 20X7: The estimated current service cost was advised by the actuary to be 6 crore.On 31 st March, 20X7, A Ltd. paid contributions of 7 crore into the plan and charged this amount as an operating expense.The annual market yield on high quality corporate bonds on 1 April, 20X6 was 8%.The estimated net liability at 31 st March, 20X7 was advised by the actuary to be - 20.5 crore. No benefits have been paid to date. (ii) On 1 st April 2XX0, E Ltd. completed the construction of a non-current asset with an estimated useful life of 20 years. The costs of construction were recognised in property, plant and equipment and depreciated appropriately. E Ltd. has a legal obligation to restore the site on which the non-current asset is located on 31 st March 2X20. The estimated cost of this restoration work, at 31 st March 2X20 prices is 2.5 crore. The directors of E Ltd. have made a provision of 0.125 crore (1/20 x 2.5 crore) in the draft balance sheet at 31 st March, 2XX1. An appropriate annual discount rate to use in any relevant calculations is 6% and at this rate the present value of 1payable in 20 years is 0.312. On the basis of the facts given above, chose the most appropriate answer to Questions 6 to 10 below based on the relevant Indian Accounting Standards (Ind AS).