Grapes Ltd. is one of the recently acquired subsidiaries of Apple Ltd. during 20X3-20X4. Grapes Ltd. has to adopt Ind AS for the first time as at…

CA Final · Financial Reporting · MTP · January 2026
Grapes Ltd. is one of the recently acquired subsidiaries of Apple Ltd. during 20X3-20X4. Grapes Ltd. has to adopt Ind AS for the first time as at 31st March, 20X3, with 1st April, 20X1 as the date of transition. As at 31st March, 20X1 the value of raw material inventories was incorrectly reported due to an error. The amounts are significant. With respect to Grapes Ltd., choose any one of the following, which will be suitable to make the financial statement as per the provisions of relevant Ind AS.
(A) Grapes Ltd. shall report the impact of the error as a correction to Statement of Profit or Loss for the comparative period i.e., for the year ended 31st March, 20X2.
(B) The correction shall be reflected in reconciliation as at the end of the first Ind AS reporting period i.e., as at 31st March, 20X2.
(C) The impact of the correction is significant and it shall be amortized on a rational and systematic basis in the first two period of Ind AS reporting i.e., years ended 31st March, 20X2 and 31st March, 20X3.
(D) The first Ind AS Financial Statements shall distinguish the correction of errors from changes in accounting policies and reported as part of the reconciliation as at 1st April, 20X1.

Suggested Answer and Working Notes:

Correct Answer: Option (D)

The first Ind AS Financial Statements shall distinguish the correction of errors from changes in accounting policies and reported as part of the reconciliation as at 1st April, 20X1.

Topics: Ind AS 110, Ind AS 2

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