Mathur India Private Limited has to present its first financials under Ind AS for the year ended 31st March, 20X3. The transition date is 1st April,…

CA Final · Financial Reporting · MTP · November 2026
Mathur India Private Limited has to present its first financials under Ind AS for the year ended 31st March, 20X3. The transition date is 1st April, 20X1. The following adjustments were made upon transition to Ind AS: (a) The Company opted to fair value its land as on the date on transition. The fair value of the land as on 1st April, 20X1 was ₹ 10 crores. The carrying amount as on 1st April, 20X1 under the existing GAAP was ₹ 4.5 crores. (b) The Company has recognised a provision for proposed dividend of ₹ 60 lacs and related dividend distribution tax of ₹ 18 lacs during the year ended 31st March, 20X1. It was written back as on opening balance sheet date. (c) The Company fair values its investments in equity shares on the date of transition. The increase on account of fair valuation of shares is ₹ 75 lacs. (d) The Company has an Equity Share Capital of ₹ 80 crores and Redeemable Preference Share Capital of ₹ 25 crores. (e) The reserves and surplus as on 1st April, 20X1 before transition to Ind AS was ₹ 95 crores representing ₹ 40 crores of general reserve and ₹ 5 crores of capital reserve acquired out of business combination and balance is surplus in the Retained Earnings. (f) The company identified that the preference shares were in nature of financial liabilities. Required What is the balance of total equity (Equity and other equity) as on 1st April, 20X1 after transition to Ind AS? Show reconciliation between total equity as per AS (Accounting Standards) and as per Ind AS to be presented in the opening balance sheet as on 1st April, 20X1. Ignore deferred tax impact.

Suggested Answer and Working Notes:

Computation of balance total equity as on 1st April, 20X1 after transition to Ind AS ₹ in crore Share capital- Equity share Capital 80.00 Other Equity General Reserve 40.00 Capital Reserve 5.00 Retained Earnings (95 – 5 - 40) 50.00 Add: Increase in value of land (10 - 4.5) 5.50 Add: Derecognition of proposed dividend (0.6 + 0.18) 0.78 Add: Increase in value of Investment 0.75 57.03 Balance total equity as on 1st April, 20X1 after transition to Ind AS 182.03 Reconciliation between Total Equity as per AS and Ind AS to be presented in the opening balance sheet as on 1st April, 20X1 ₹ in crore Equity share capital 80.00 Redeemable Preference share capital 25.00 105.00 Reserves and Surplus 95.00 Total Equity as per AS 200.00 Adjustment due to reclassification Preference share capital classified as financial liability (25.00) Adjustment due to derecognition Proposed Dividend not considered as liability as on 1st April, 20X1 0.78 Adjustment due to remeasurement Increase in the value of Land due to remeasurement at fair value 5.50 Increase in the value of investment due to remeasurement at fair value 0.75 6.25 Equity as on 1st April, 20X1 after transition to Ind AS 182.03

Topics: Ind AS 101

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