MS Ltd., a diversified organisation with several subsidiaries and business lines, has prepared its financial statements for the year ended 31st…

MS Ltd., a diversified organisation with several subsidiaries and business lines, has prepared its financial statements for the year ended 31st March in accordance with the Indian Accounting Standards. During the preparation, the management of MS Ltd. are facing following issues: (i) MS Ltd. has acquired a heavy machinery at a cost of 1,00,00,000 (with no breakdown of the component parts). The estimated useful life is 10 years. At the end of the sixth year, one of the major components, the turbine requires replacement, as further maintenance is uneconomical. The remainder of the machine is perfect and is expected to last for the next four years. The cost of a new turbine is 45,00,000. The discount rate assumed is 5%. (ii) The rate of income tax applicable to MS Ltd. is 20%. The following information relates to transactions, assets and liabilities of MS Ltd during the year ended 31st March 20X6: MS Ltd. has a 40% shareholding in L Ltd. MS Ltd purchased this shareholding for 45Cr. The shareholding gives MS Ltd significant influence over L Ltd but not control and therefore MS Ltd. accounts for its interest in L Ltd using the equity method. The equity method carrying value of MS Ltd.'s investment in L Ltd was 70Cr on 31st March 20X5 and 75Cr on 31st March 20X6. In the tax jurisdiction in which MS Ltd operates, profits recognised under the equity method are taxed if and when they are distributed as a dividend or the relevant investment is disposed of.MS Ltd. measures its head office building using the revaluation model. The building is revalued every year on 31st March. On 31st March 20X5, carrying value of the building (after revaluation) was 40Cr and its tax base was 22Cr. During the year ended 31st March 20X6, MS Ltd. charged depreciation in its statement of profit or loss of 2Cr and claimed a tax deduction for tax depreciation of 1.25 Cr. On 31st March 20X6, the building was revalued to 45 Cr. In the tax jurisdiction in which MS Ltd. operates, revaluation of property, plant and equipment does not affect taxable income at the time of revaluation. Analyze the transactions mentioned above and choose the most appropriate option in the below questions 4 to 8 in line with relevant Ind AS: