Illustration 19

answered on 01-Jun-24 18:50

Why revaluation surplus transfered to retained earnings?

latest answer

As per INd AS 16, the revaluation surplus can be periodically transferred to retained earnings. At the time of disposal of asset, the balance in revaluation surplus is to be transferred to retained earnings.

Sugathan P.R

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investment property doubt

answered on 27-May-24 13:10

how an item let out under finance lease can be consider as investment property??

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An item which is held for letting out on finance lease is IP. Once leased out, 116 applicable.

Sanoj C Sunny

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Hotel vs Restaurant Example

answered on 25-May-24 08:53

In the Hotel vs Restaurant example, If the restaurants are given out on finance lease, then the asset will be derecognised in the books of lessor. Then how will it be classified under INDAS 40 as Investment property?

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Till it is let out, it will be classified under IP.

Swathi S

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Investment Property

answered on 27-May-24 15:58

Case 1: There is a CA Academy. It rents out its building as hostel for the Students who are taking classes in their academy. Whether such building to be covered under INDAS 16 or INDAS 40? Case 2: There is a CA Academy. It rents out its building as hostel generally for all. (not only for its students).Whether such building to be covered under INDAS 16 or INDAS 40?

latest answer

In both cases when we say hostel, there would be additional service like food, laundry, wifi etc. Hence it would be for business purpose of providing services and Ind AS 16. however if it is only letting out of rooms with no additional services - Ind AS 40 - IP.

Swathi S

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FA - Interest Income

answered on 24-May-24 10:01

We have solved many illustration relating to FL which involves interest and dividend payments. We need to accrue the same every year at EIR and pass payment entry. Basically we prepare the interest payment table. Is the same thing also applicable for Financial asset. Let’s say the illustration solved in the lecture will be solved in the same manner for FA also ?

latest answer

Yes same way.

Chandan Subudhi

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Dilutive shares arising due to ESOP

answered on 27-May-24 16:02

Hi Sir, When calculating dilutive shares arising from outstanding options as of the reporting date, it's assumed that all options will be converted, and equivalent shares for weighted average options outstanding (against which consideration will not be received) are considered in the denominator. However, why isn't the unamortized option cost (e.g., ESOP charge) reduced in the numerator? This cost, which will be allocated in future periods, is to be booked upfront now (for purpose of DEPS calculation) as we're assuming all outstanding options are exercised. While it's understood that there won't be any savings resulting from such conversion, there are future costs associated with it.

latest answer

The point of calculating diluted EPS is to understand what would happen to current EPS if the shares were converted now. We are not looking at future expenses. Similarly. when convertible debentures are converted, there would be potential savings in the future as well. but we consider what we would have saved in the current period.

SravaN KumaR

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111

Financial Instrument- Convertible Preference Shares

answered on 27-May-24 16:16

Compute financial instrument treatment. Is my understanding correct ? - Convertible Preference Shares : - Optional : Compute FV of FL and difference will be Equity - Partial : Compute the FV of FL = PV of partial redemption and difference will be Equity - Compulsory : No FL only Equity as there is no redemption

latest answer

Yes

Chandan Subudhi

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FVOCI

answered on 21-May-24 23:15

What is the concept of FVOCI? and in which chapter is this discussed in detail?

latest answer

Financial instruments

VIJAY ANVESH VADLAPUDI

CA Inter

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Puttable Instrument - Fix to fix test

answered on 27-May-24 16:23

I understand that generally Puttable instrument is a FL. But If it fulfils 6 conditions then it becomes Equity. Where as Fix to Fix test is applicable for other type of instruments.can you please make me understand this attached part where you are explaining the fix to fix test of Puttable instrument.

latest answer

This are considered as equity only for limited purposes otherwise entities like mutual funds will not have equity at all.

Chandan Subudhi

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Fixed Lease Payment at 15:10 of this video should be 1,90,000 instead of 1,95,000?

answered on 20-May-24 14:38

Sir, in this video, at 15:10, when we are working out the Present Value of the lease payments after Modification at IRR = 5.43%, aren't the Fixed lease payments ₹1,90,000 instead of ₹1,95,000. In this video, though you are changing the Present value Factor, but you have not changed the amount of the Fixed Lease Payment to 1,90,000 from 1,95,000. Shouldn't it be ₹1,90,000? The answer will not change since the % of PV of Lease payments to the Fair Value of the Asset will only come down as a result of the Calculation with 1,90,000 in place of 1,95,000.

latest answer

Issue due to copy-paste. Thanks for highlighting. Will update.

Antara MuraliKrishnan

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