Dynamic Infra Engineering Limited (DIEL) is a large multi-national, listed company in India. DIEL has a tremendous track record of showing…

Dynamic Infra Engineering Limited (DIEL) is a large multi-national, listed company in India. DIEL has a tremendous track record of showing consistent business growth and is one of the key companies closely monitored by the equity analysts, PE investors, mutual funds and other stakeholders.You as a dynamic Chartered Accountant possessing inherent qualities viz. clarity of thought on the technical aspects of financial reporting, strategic financial management, cost and management accounting and legal compliances of various corporate and economic laws have recently joined DIEL as its Vice President (Finance). Upon assuming your portfolio in the Company, the top management has clearly defined the role you need to play, given the multiple challenges impacting the organization. Therefore, timing of your entry in the company has become very crucial.The top management is scheduled to meet on 15th January 2027 wherein, several issues are likely to be discussed with you seeking your professional inputs and guidance.Despite its consistent growth, DIEL operates in an increasingly dynamic business environment characterised by rapid digitalisation, evolving regulatory and sustainability expectations, changing investor priorities and intensifying competitive pressures. The top management is deliberating whether the company should continue to rely substantially on its existing business model and capabilities or invest in developing and strengthening new capabilities to sustain its competitive position and long-term growth.One of the Indian subsidiaries of DIEL namely 'Blue Metal Infra Engineering Limited' (BMIEL) is engaged in the business of building highway projects in India. It has borrowed US $ 200 million from a financial institution (FI) resident in US to invest in one of its ongoing buildings of highway projects in India. The rate of interest charged is 3% per annum. The US $ may be assumed 80. The top management wants to understand whether the income of the non-resident FI is deemed to accrue or arise in India and the legal position in case the money is invested in one of its ongoing projects in Singapore.DIEL has incurred the following transactions for acquiring Plant "X' in part exchange of an old Plant Y. (₹ in Lakhs) Sale of scrap from the old site 10 Cost of construction of new site 480 Fair value of the old Plant Y, at which the supplier of the new Plant X has agreed to take it 26 The cash price paid to supplier for new Plant X 320 The carrying amount of old Plant Y 10 The present value of estimated dismantling cost of the site at the end of its useful life 16 Wages paid for installation of the Plant 40 Wages paid for Trial Run 16 Freight paid 16 GST @ 18% is paid both on purchase of plant and on freight. DIEL is eligible to claim Input Tax Credit on same. Loss amount for low-capacity utilization of the plant after installation 40 Cost of launching the product to be produced from the plant 10 Administration and general overheads 20 Incidental cost not directly related to installation 5 DIEL wants to alter the dates of payments of interest on bonds from yearly to half yearly from 1st April 2027. The said proposal is to be laid before the Company's board meeting to be held on 25th January 2027. These bonds are listed on Bombay Stock Exchange.In the balance sheet of a subsidiary of DIEL as at 31 March 2026, the sub-head inventories contained an item "goods in transit" in which a consolidated amount aggregating the cost of raw materials in transit and loose tools billed on the company but delivery not made to the company had been specified.DIEL is contemplating for appointing a Registered Valuer, possessing the prescribed qualifications to carry out the valuation of the company's assets and liabilities.The shareholders of Star Limited, a subsidiary of DIEL is proposing to fix the statutory auditors' remuneration as a fixed sum plus a percentage based on the profitability of the company.DIEL is desirous to purchase a residential plot (Plot X) for constructing a staff quarters for senior staff of the Company, which measures 100 square metres. This plot is a corner plot and has direct proximity to a prominent park. To find out the value of the plot, DIEL wants to use the sales comparison approach based on the benchmark value of a similar type of property. The company gathers data on two recently sold comparable properties in the same neighbourhood. The selling price of the plots was determined as per the benchmark value of the locality. Comparable (Comp) Selling Price (₹) Size (Sq. Meters) Plot Type Park Proximity Comp A ₹50,00,000 120 Corner No Comp B ₹48,00,000 90 Inner No Market Adjustments Required (Adjusting comparables to match Plot X): Size Adjustment: The standard price difference for size variability is ₹ 10,000 per square meter. Plot Type Adjustment: Corner plots command a 5% premium over inner plots (based on the inner plot value). Park Proximity Adjustment: Presence of park proximity adds ₹ 2,00,000 to the value. Since the property (Plot X) is in a prime location of the city, M Limited approached DIEL to provide the plot on long term lease basis (on perpetuity) for life at a price of ₹ 5,00,000 per annum. The municipality tax comes to ₹ 10,000 per annum to be borne by DIEL, Besides, DIEL is required to construct a strong boundary wall before handing over the plot on lease to M Ltd. The cost of construction of Boundary wall will be ₹ 5,00,000. DIEL's required rate of return for this investment reflective of the market risk is 8%.DIEL entered into certain transactions with regard to acquiring Plant 'X' in part exchange of an old Plant Y. Based on the data given in the case study in this regard, answer the following: (i) How will the Assets be recognized/derecognised, in the books of DIEL, as per Ind AS? (ii) At what value the assets be recognised in the books DIEL? (iii) How will Plant Y given in part exchange for Plant X be accounted for?