Following is the extract of the consolidated financial statements of A Ltd. for the year ended on: Asset/ (liability) Carrying amount as on 31 st…

CA Final · Financial Reporting · MTP · May 2026
Following is the extract of the consolidated financial statements of A Ltd. for the year ended on: Asset/ (liability) Carrying amount as on 31 st March, 20X1 (In ₹ '000) Attributed goodwill 200 Intangible assets 950 Financial asset measured at fair value through other comprehensive income 300 Property, plant & equipment 1,100 Deferred tax asset 250 Current assets – inventory, receivables and cash balances 600 Current liabilities (850) Non-current liabilities – provisions (300) Total 2,250 On 15 th September 20X1, Entity A decided to sell the business. It noted that the business meets the condition of disposal group classified as held for sale on that date in accordance with Ind AS 105. However, it does not meet the conditions to be classified as discontinued operations in accordance with that standard. The disposal group is stated at the following amounts immediately prior to reclassification as held for sale. Asset/ (liability) Carry amount as on 15 th September 20X1 (In ₹ '000) Attributed goodwill 200 Intangible assets 930 Financial asset measured at fair value through other comprehensive income 360 Property, plant & equipment 1,020 Deferred tax asset 250 Current assets – inventory, receivables and cash balances 520 Current liabilities (870) Non-current liabilities – provisions (250) Total 2,160 Entity A proposed to sell the disposal group at 19,00,000. It estimates that the costs to sell will be - 70,000. This cost consists of professional fee to be paid to external lawyers and accountants. As at 31 st March 20X2, there has been no change to the plan to sell the disposal group and entity A still expects to sell it within one year of initial classification. Mr. X, an accountant of Entity A remeasured the following assets / liabilities in accordance with respective standards as on 31 st March 20X2: Available for sale: (In ₹ '000) Financial assets 410 Deferred tax assets 230 Current assets- Inventory, receivables and cash balances 400 Current liabilities 900 Non- current liabilities- provisions 250 The disposal group has not been trading well and its fair value less costs to sell has fallen to 16,50,000. Compute the value of all assets/ liabilities within the disposal group as on the following dates in accordance with Ind AS 105: (a) 15 September, 20X1 and (b) 31 st March, 20X2

Suggested Answer and Working Notes:

As at 15 th September, 20X1 The disposal group should be measured at 18,30,000 (19,00,000-70,000). The impairment write down of 3,30,000 (₹ 21,60,000 - 18,30,000) should be recorded within profit from continuing operations. The impairment of 3,30,000 should be allocated to the carrying values of the appropriate non-current assets. Asset/ (liability) Carrying value as at 15 th September, 20X1 Impairment Revised carrying value as per Ind AS 105 Attributed goodwill 200 (200) - Intangible assets 930 (62) 868 Financial asset measured at fair value through other comprehensive income 360 - 360 Property, plant & equipment 1,020 (68) 952 Deferred tax asset 250 - 250 Current assets – inventory, receivables and cash balances 520 - 520 Current liabilities (870) - (870) Non-current liabilities – provisions (250) - (250) Total 2,160 (330) 1,830 The impairment loss is allocated first to goodwill and then prorata to the other assets of the disposal group within Ind AS 105 measurement scope. Following assets are not in the measurement scope of the standard- financial asset measured at other comprehensive income, the deferred tax asset or the current assets. In addition, the impairment allocation can only be made against assets and is not allocated to liabilities. As on 31 March, 20X2: All of the assets and liabilities, outside the scope of measurement under Ind AS 105, are remeasured in accordance with the relevant standards. The assets that are remeasured in this case under the relevant standards are the financial asset measured at fair value through other comprehensive income (Ind AS 109), the deferred tax asset (Ind AS 12), the current assets and liabilities (various standards) and the non-current liabilities (Ind AS 37). Asset/ (liability) Carrying amount as on 15 th September, 20X1 Change in value to 31 st March 20X2 Impairment Revised carrying value as per Ind AS 105 Attributed goodwill - - - - Intangible assets 868 - (29) 839 Financial asset measured at fair value through other comprehensive income 360 50 - 410 Property, plant & equipment 952 - (31) 921 Deferred tax asset 250 (20) - 230 Current assets – inventory, receivables and cash balances 520 (120) - 400 Current liabilities (870) (30) - (900) Non-current liabilities – provisions (250) - - (250) Total 1,830 (120) (60) 1,650

Topics: Ind AS 105, General

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