Win Limited is a first time adopter of Ind AS. The company has a financial asset classified as held-to-maturity (HTM) under previous GAAP. Under Ind…

CA Final · Financial Reporting · PYQS · May 2025
Win Limited is a first time adopter of Ind AS. The company has a financial asset classified as held-to-maturity (HTM) under previous GAAP. Under Ind AS 101, the company decides to classify the asset as a Financial Asset at Fair Value through Profit or Loss. Determine the impact of this decision on the first set of Ind AS financial statements of Win Limited.
(A) Win Limited must apply the fair value treatment retrospectively for all the periods, restating the financial asset in the comparative periods.
(B) Win Limited must recognize the financial asset at fair value at the transition date and the difference from the carrying amount under previous GAAP is adjusted through Retained Earnings.
(C) Win Limited must classify all similar financial assets as financial assets at Fair Value through Profit or Loss in future periods under Ind AS.
(D) Win Limited is required to recognize the financial asset at deemed cost in the first Ind AS financial statements.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Win Limited must recognize the financial asset at fair value at the transition date and the difference from the carrying amount under previous GAAP is adjusted through Retained Earnings.

Topics: Ind AS 109, Ind AS 110, General

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