You have recently qualified as a Chartered Accountant and being recruited by Star Limited. You are being interviewed by the CFO of the Company. You…

You have recently qualified as a Chartered Accountant and being recruited by Star Limited. You are being interviewed by the CFO of the Company. You are provided with the following situations: (i) Star Limited acts as a mediator between a lessee and a lessor wherein lessee has taken a commercial property on lease from the lessor. As per the lease agreement, the rent will be paid by the lessee to Star Limited. Star Limited will then pay the rent to the lessor. (ii) Star Limited had, on 1st April 2024, purchased a machine for 110.00 lakhs. The useful life of the machinery is 10 years and the residual value is estimated to be - 10.00 lakhs. The machine is depreciated on straight line method. On 31st March 2025, a test for impairment was conducted. With respect to the aforesaid machine, the fair value less costs to sell is 82.00 lakhs and value in use is 72,00 lakhs. (iii) Star Limited had incurred following expenditure for the development of its first and only software product, customized to Indian environment, which is to be offered to its Indian customers. The development commenced on 1st April 2024 and ended on 31st December 2024 when the software was ready for sale. However, the first sale of the product was made on 1st April 2025. The following information is made available to you: Particulars Amount (₹ in lakhs) Purchase price of imported software 1,800.00 Direct employee costs of software engineers for full financial year 2024-2025 3,600.00 Testing costs paid to retainers 5,400.00 Other costs directly related to customization (which includes an abnormal cost of 15.00 lakhs in respect of repairing the damage as a result of a security breach) 1,350.00 Professional fees paid for external software developers 660.00 Cost of training provided to sales staff 585.00 Cost of marketing & promotion 4,680.00 Administrative and general overheads 2,475.00 (iv) Star Ltd. has certain cases pending before various forums under different laws. The following table is a summary of such pending cases: Particulars No. of case Outcome Probability Estimated damages per case Filed by employees 28 Lose 60% 2.00 lakhs Filed by customers 12 Lose 70% 1.00 lakhs Filed by vendors 2 Lose 50% Extremely difficult to make reliable estimate Filed against vendor 1 Win 90% On the basis of information provided above, you are required to choose the most appropriate answer to the below mentioned questions 4 to 7 in line with relevant Ind AS: