Advise 3CL about the provision to be made for the receivable from Lifesciences Research Private Limited (LRPL) and the inventory held by 3CL in…

(a) In January 2025, 3CL commenced manufacturing specialized scientific apparatus pursuant to a confirmed order received from Lifesciences Research Private Limited (LRPL). The equipment was customized in accordance with specific drawings and technical designs provided by the customer. By September 2025, approximately 50% of the apparatus had been completed and delivered. However, in November 2025, LRPL requested a postponement of the delivery schedule due to liquidity constraints. The customer further requested 3CL to withhold delivery of finished goods and discontinue production of the remaining units. Subsequently, during F.Y. 2025–26, 3CL filed a petition for winding up of LRPL. As at 31st March 2026, the balances relating to this contract were as follows: Trade receivables from LRPL:3 croresInventory:Finished goods:2 croresWork-in-progress (WIP):1 crore As per Ind AS 2, inventories are assets: (a) held for sale in the ordinary course of business; (b) in the process of production for such sale; or (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services Accordingly, the scientific apparatus (both finished goods and WIP) held by 3CL as on 31st March 2026 qualify as inventory. Ind AS 2 further requires inventories to be measured at the lower of cost and net realisable value (NRV). Since LRPL has postponed the delivery schedule due to a liquidity crunch, the entire cost incurred on the scientific apparatus intended for supply has been classified as inventory. The scientific apparatus remains in the possession of the company and may potentially be sold in the market. Accordingly, the company should value such inventory in accordance with the principles laid down in Ind AS 2, i.e., at the lower of cost or net realisable value (NRV). Although the goods were produced as per the customer's specifications, the company should determine the NRV of these goods in the market and value them accordingly. Any decline in the value of such scientific apparatus should be appropriately recognised in the books of account. In the absence of specific information regarding the NRV of the work-in-progress and finished goods in the question, and assuming that cost is lower than NRV, the company shall value its inventory at 3 crores (i.e., scientific apparatus – WIP 1crore plus scientific apparatus – finished goods 2crores) in accordance with Ind AS 2. Alternatively, if it is assumed that no buyer exists for such highly customized scientific apparatus, the NRV would be Nil. In that case, the entire carrying amount of the finished goods and WIP would need to be written off in the books. With regard to the trade receivables balance of 3crores, since the company has filed a petition for winding up against the customer during F.Y. 2025-26, it is probable that the amount may not be recoverable. Accordingly, a provision for doubtful debts amounting to 3 crores should be recognised in the books against the debtor's amount.