BioTech Electronics Ltd. (BEL) is a diversified company with investments in listed entities and also manufactures and sells electronic products. BEL…

BioTech Electronics Ltd. (BEL) is a diversified company with investments in listed entities and also manufactures and sells electronic products. BEL had recently implemented Optical Character Recognition (OCR) technology to automatically capture information from supplier invoices and receipts and transfer the extracted data directly into its accounting system. While preparing its financial statements for the year ended 31 March 20X3, the accountant of BEL is facing challenges in determining the accounting treatment for certain events. BEL holds equity shares of A Ltd., a listed biotech company that has developed a new drug in the final phase of clinical trials. BEL accounts for these shares at fair value through profit or loss. On 31 March 20X3, the drug approval authority informed A Ltd.'s management that the drug had not been approved. A Ltd.'s shares had, however, closed at ₹ 36 per share on 31 March 20X3. After market hours, A Ltd. issued a press release announcing the failed clinical trial. When the market opened on the next working day, A Ltd.'s shares opened at ₹ 22.50 per share. BEL's electronics division sells 1,000 televisions to Retailer R for ₹ 50,00,000, i.e., ₹ 5,000 per television. Under a price-protection arrangement, BEL agrees to reimburse R for any difference between ₹ 5,000 and the lowest price at which BEL sells the same television during the following six months. Based on its experience, BEL estimates the following possible price reductions in next 6 months: Price reduction Probability Nil 70% ₹ 500 20% ₹ 1,000 10% BEL concludes that the expected value method provides the best estimate of variable consideration. BEL is also involved in a legal dispute with the GST Department. The company had a tax liability as at 31 March 20X3. On 15 April 20X3, the court passed an order in favour of BEL, resulting in a reduction in the tax liability existing as at 31 March 20X3. The financial statements for 20X2-20X3 were approved by the Board of Directors on 15 May 20X3. Management does not propose to consider the court order because it is favourable to the company. It argues that considering a favourable event after the reporting period would be inconsistent with the realisation concept of accounting. Analyze the transactions mentioned above and choose the most appropriate option in questions 1 to 6 in line with relevant Ind AS: