Under Ind AS 2 (Inventories), how is Net Realisable Value (NRV) determined for Raw Materials when finished goods are sold at or above cost vs below cost?

Raw materials and supplies held for use in production are NOT written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. However, when a decline in the price of materials indicates that the cost of the finished products exceeds NRV, the materials are written down to their Replacement Cost.

Under Ind AS 20 (Accounting for Government Grants), how are Capital Grants (grants related to assets) presented in the Balance Sheet?

An entity can present grants related to assets in the balance sheet either: 1) By setting up the grant as Deferred Income (recognized in P&L on a systematic basis over the useful life of the asset), OR 2) By deducting the grant in arriving at the carrying amount of the asset (resulting in reduced depreciation charge over the asset's life).

In Standard Costing, how is Fixed Overhead Volume Variance decomposed into Efficiency, Capacity, and Calendar Variances?

Fixed Overhead Volume Variance = Absorbed FOH - Budgeted FOH = (Standard Hours for actual output - Budgeted Hours) x Standard FOH Rate per hour. It splits into: 1) Efficiency Variance = (SH - AH) x SR, 2) Capacity Variance = (AH - Revised Budgeted Hours) x SR, and 3) Calendar Variance = (Actual Days - Budgeted Days) x Standard Rate per day.

Under Ind AS 37 (Provisions, Contingent Liabilities and Contingent Assets), what are the three conditions for recognizing a Provision and how are Onerous Contracts treated?

A provision is recognized when: 1) An entity has a present obligation (legal or constructive) as a result of a past event, 2) It is probable (>50%) that an outflow of resources will be required, and 3) A reliable estimate can be made. For an Onerous Contract (where unavoidable costs exceed economic benefits), the provision is measured at the LOWER of the cost of fulfilling the contract and any compensation/penalties arising from failure to fulfill it.

Under Ind AS 110 (Consolidated Financial Statements), what are the three elements of 'Control' over an investee, and how are intra-group unrealized profits eliminated?

An investor controls an investee if and only if it has all three: 1) Power over the investee, 2) Exposure, or rights, to variable returns from its involvement, and 3) The ability to use its power to affect the amount of the investor's returns. Downstream unrealized profit is eliminated 100% against the Parent's share; Upstream unrealized profit is eliminated between Parent and NCI in their proportionate ownership shares.

Under Ind AS 33 (Earnings Per Share), how is Diluted EPS calculated and when are potential equity shares considered anti-dilutive?

Diluted EPS adjusts Basic EPS numerator (profit attributable to ordinary equity holders) for after-tax interest/dividends saved on dilutive potential ordinary shares, and adjusts the denominator for the weighted average number of shares that would be issued on conversion. Potential ordinary shares are ranked by incremental EPS (lowest to highest) and excluded if their inclusion increases EPS or decreases loss per share from continuing operations (anti-dilutive).

Under Ind AS 16 (Property, Plant and Equipment), how is a Decommissioning / Site Restoration liability accounted for at initial recognition and subsequently under Ind AS 37?

At initial recognition, the present value of estimated dismantling/restoration costs is capitalized into the cost of the PPE with a corresponding Provision under Ind AS 37. Subsequently, the PPE is depreciated over its useful life, while the unwinding of discount on the provision is recognized as a Finance Cost in Profit or Loss each year.

Under Ind AS 116 (Leases), how does a Lessee account for a lease at initial recognition, and what are the two recognition exemptions?

A lessee applies a single on-balance-sheet model: recognizes a Lease Liability (present value of unpaid lease payments discounted at the interest rate implicit in the lease or incremental borrowing rate) and a Right-of-Use (ROU) Asset. Exemptions (elective): 1) Short-term leases (lease term <= 12 months with no purchase option) and 2) Leases of low-value underlying assets.

Under Ind AS 36, can an impairment loss recognized in prior periods be reversed?

An impairment loss recognized for Goodwill SHALL NEVER be reversed in a subsequent period. For assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount, up to the carrying amount that would have been determined (net of depreciation) had no impairment been recognized.

Under Ind AS 115, how is Variable Consideration constrained, and how are Significant Financing Components treated?

Variable consideration (discounts, rebates, bonuses, penalties) is estimated using Expected Value or Most Likely Amount and included in transaction price ONLY to the extent that it is 'highly probable' that a significant reversal in cumulative revenue will not occur. Under the practical expedient, no adjustment for a financing component is required if the period between transfer of goods/services and payment is 1 year or less.

What are the three stages of the Expected Credit Loss (ECL) impairment model under Ind AS 109?

Stage 1 (Performing - no significant increase in credit risk since initial recognition): Recognize 12-month ECL and calculate effective interest on Gross Carrying Amount. Stage 2 (Underperforming - significant increase in credit risk): Recognize Lifetime ECL, interest on Gross Carrying Amount. Stage 3 (Credit-impaired): Recognize Lifetime ECL and calculate interest revenue on Net Carrying Amount (Gross minus loss allowance).

Under Ind AS 109 (Financial Instruments), what are the three classification categories for Financial Assets and the two tests used?

1) Amortised Cost (Business Model = Hold to Collect contractual cash flows AND SPPI test passed - Solely Payments of Principal and Interest), 2) FVTOCI (Business Model = Hold to Collect and Sell AND SPPI passed; or irrevocable election for non-trading equity investments), 3) FVTPL (residual category, including derivatives and trading equity).

Under Ind AS 36 (Impairment of Assets), how is the Recoverable Amount defined and in what order is an impairment loss allocated to a Cash-Generating Unit (CGU)?

Recoverable Amount is the HIGHER of an asset's Fair Value less Costs of Disposal (FVLCD) and its Value in Use (VIU - present value of future pre-tax cash flows). CGU impairment loss is allocated first to reduce the carrying amount of any Goodwill allocated to the CGU, and then pro-rata to the other assets of the CGU based on their carrying amounts (never reducing an asset below the highest of its FVLCD, VIU, or zero).

In Throughput Accounting (Goldratt's Theory of Constraints - TOC), how are Throughput Contribution and the Throughput Accounting Ratio (TA Ratio) calculated?

Throughput Contribution = Sales Revenue - Totally Variable Cost (normally ONLY Direct Material Cost; all labor and overheads are treated as Fixed Operating Expense). Return per Factory Hour = Throughput Contribution / Time on Bottleneck Resource; Cost per Factory Hour = Total Factory Operating Expense / Total Time available on Bottleneck; TA Ratio = Return per Factory Hour / Cost per Factory Hour (target > 1).

In Strategic Cost Management (Transfer Pricing), what is the general minimum and maximum Transfer Price formula when the supplying division has spare capacity vs full capacity?

Minimum Transfer Price (set by supplying division) = Marginal Cost per unit + Opportunity Cost per unit (lost contribution on external sales foregone). Under spare capacity, Opportunity Cost = 0, so Min TP = Marginal Cost; under full capacity, Min TP = Market Price (less any selling cost savings). Maximum Transfer Price (set by buying division) = lower of external market purchase price or Net Realisable Value of final product less own processing costs.

In Standard Costing, what are the formulas for Direct Material Cost, Price, Usage, Mix, and Yield Variances?

Material Cost Variance (MCV) = (SQ x SP) - (AQ x AP); Material Price Variance (MPV) = (SP - AP) x AQ; Material Usage Variance (MUV) = (SQ - AQ) x SP; Material Mix Variance (MMV) = (RSQ - AQ) x SP (where RSQ is Revised Standard Quantity); Material Yield Variance (MYV) = (SQ - RSQ) x SP.

Under Ind AS 105 (Non-current Assets Held for Sale and Discontinued Operations), how is an asset classified as 'Held for Sale' measured and depreciated?

An asset (or disposal group) classified as Held for Sale (available for immediate sale in its present condition and sale is highly probable within 12 months) is measured at the LOWER of its Carrying Amount and Fair Value less Costs to Sell, and Depreciation on such assets CEASES from the date of classification.

In CA Final AFM (Portfolio Management & Derivatives), what are the Capital Asset Pricing Model (CAPM) formula and Put-Call Parity theorem for European options?

CAPM Expected Return: E(R_i) = R_f + Beta_i * [E(R_m) - R_f], where Beta_i = Cov(i, m) / Var(m). Put-Call Parity (for European options on a non-dividend paying stock with strike K and maturity T): Call + K * e^(-rT) = Put + S_0.

In CA Final Advanced Financial Management (AFM), how is Free Cash Flow to Firm (FCFF) vs Free Cash Flow to Equity (FCFE) calculated and discounted?

FCFF = EBIT(1 - t) + Depreciation/Non-cash charges - Capital Expenditure - Change in Non-Cash Working Capital (discounted at WACC to find Enterprise Value). FCFE = FCFF - Interest(1 - t) + Net Borrowing, or Net Income + Depreciation - CapEx - Change in Non-Cash WC + Net Borrowing (discounted at Cost of Equity Ke to find Equity Value directly).

Under Ind AS 23 (Borrowing Costs), how are Specific Borrowings and General Borrowings capitalized on a Qualifying Asset?

For Specific Borrowings: Capitalize actual borrowing costs incurred during the period LESS any investment income earned on the temporary investment of those borrowings. For General Borrowings: Apply the Capitalization Rate (weighted average borrowing cost of general borrowings) to the weighted average expenditure incurred on the qualifying asset.

Under Ind AS 108 (Operating Segments), what are the three quantitative thresholds (the 10% and 75% rules) for identifying Reportable Segments?

An operating segment is reportable if it meets any of the 10% thresholds: 1) Reported revenue (external + intersegment) >= 10% of combined revenue of all segments, 2) Absolute reported profit/loss >= 10% of the greater of combined profit of profitable segments or combined loss of loss-making segments, or 3) Segment assets >= 10% of combined assets. Furthermore, total external revenue reported by operating segments must constitute at least 75% of the entity's total revenue.

Under Ind AS 109 and Ind AS 32, how is a Compound Financial Instrument (such as a convertible debenture with a fixed-for-fixed conversion option) accounted for by the issuer?

Split Accounting is applied: First, measure the Financial Liability component as the present value of contractual cash flows discounted at the market interest rate for a similar non-convertible debt instrument; Second, assign the residual amount (Issue Proceeds minus Liability Component) to the Equity Component (which is never subsequently remeasured).

Under Ind AS 102 (Share-based Payment), how do Equity-Settled and Cash-Settled (SARs) share-based payment transactions differ in measurement?

Equity-Settled (ESOPs): Measured at the Fair Value of the equity instruments at the GRANT DATE, recognized over the vesting period with a credit to 'Share Options Outstanding Account' (Equity), and NOT remeasured for subsequent changes in market price. Cash-Settled (Share Appreciation Rights - SARs): Measured at the Fair Value of the liability and REMEASURED at each reporting date and settlement date through Profit or Loss.

Under Ind AS 116, how is a Sale and Leaseback transaction accounted for when the transfer of the asset satisfies vs does not satisfy Ind AS 115 as a sale?

If the transfer IS a sale under Ind AS 115: the seller-lessee measures the ROU asset at the proportion of the previous carrying amount that relates to the right of use retained (Carrying Amount x PV of Lease Payments / Fair Value) and recognizes only the gain/loss relating to the rights transferred to the buyer-lessor. If NOT a sale: treated as a financing transaction under Ind AS 109.

Under Ind AS 12 (Income Taxes), what is the Balance Sheet approach for Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)?

Compare the Carrying Amount (CA) of an asset/liability in the Balance Sheet with its Tax Base (TB). For an Asset: if CA > TB -> Taxable Temporary Difference -> recognize DTL; if CA Deductible Temporary Difference -> recognize DTA (to the extent probable that future taxable profit will be available). For a Liability, the signs reverse.

Under Ind AS 115, what are the three criteria under which an entity recognizes revenue 'over time' rather than 'at a point in time'?

Revenue is recognized over time if any ONE of these is met: 1) Customer simultaneously receives and consumes the benefits as the entity performs, 2) The entity's performance creates or enhances an asset that the customer controls as it is created, or 3) Performance does not create an asset with an alternative use to the entity AND the entity has an enforceable right to payment for performance completed to date.

In Activity-Based Costing (ABC), how do Unit-level, Batch-level, Product-sustaining, and Facility-sustaining activities differ?

Unit-level: performed for each unit produced (machine hours, direct energy); Batch-level: performed for each batch regardless of units in the batch (machine setups, purchase orders, inspection); Product-sustaining: performed to support a product line (product design, engineering change notices); Facility-sustaining: general factory administration/rent.

Under Ind AS 19 (Employee Benefits), where are the components of Defined Benefit Cost (Service Cost, Net Interest, and Remeasurements/Actuarial Gains & Losses) recognized?

Current Service Cost, Past Service Cost, gains/losses on settlement, and Net Interest on the net defined benefit liability (asset) are recognized in Profit or Loss. Remeasurements of the net defined benefit liability (including actuarial gains and losses and return on plan assets excluding amounts in net interest) are recognized in Other Comprehensive Income (OCI) and are NEVER reclassified to P&L.

Under Ind AS 103 (Business Combinations), how is Goodwill or Bargain Purchase calculated, and what are the two options for measuring Non-Controlling Interest (NCI)?

Goodwill = Consideration Transferred + NCI + Acquisition-date Fair Value of previously held equity interest - Net Identifiable Assets Acquired (at Fair Value). NCI can be measured on a transaction-by-transaction basis at either: 1) Fair Value (Full Goodwill method), or 2) Proportionate share of the acquiree's identifiable net assets (Partial Goodwill method). Bargain purchase gain is credited directly to OCI and accumulated in Capital Reserve.

Under Ind AS 21 (The Effects of Changes in Foreign Exchange Rates), how are Monetary vs Non-Monetary items translated at the reporting date?

Foreign currency Monetary items (cash, receivables, payables, loans) are translated using the Closing Rate (exchange gains/losses go to P&L); Non-monetary items measured at historical cost (PPE, inventory at cost) are translated using the exchange rate at the date of transaction; Non-monetary items measured at fair value use the rate at the date when fair value was determined.

In CA Cost & Management Accounting (Marginal Costing & CVP Analysis), what are the formulas for P/V Ratio, Break-Even Point (BEP), and Margin of Safety (MOS)?

Contribution = Sales - Variable Cost; P/V Ratio = (Contribution / Sales) x 100 = (Change in Profit / Change in Sales) x 100; Break-Even Point (in Rs.) = Fixed Cost / P/V Ratio; Margin of Safety (in Rs.) = Actual Sales - BEP Sales = Profit / P/V Ratio; Operating Leverage = Contribution / EBIT.

What is the 5-Step Model for revenue recognition under Ind AS 115 (Revenue from Contracts with Customers)?

Step 1: Identify the contract(s) with a customer; Step 2: Identify the separate performance obligations; Step 3: Determine the transaction price; Step 4: Allocate the transaction price to the performance obligations (based on standalone selling prices); Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

ICAI CA Intermediate & Final (Financial Reporting & Ind AS): Ind AS 115 Revenue, Ind AS 116 Leases, Ind AS 109 Financial Instruments, Consolidation & Costing

Advanced ICAI CA Intermediate & Final Financial Reporting (Ind AS) and Strategic Cost Management flashcards covering Ind AS 115, Ind AS 116, Ind AS 109, Ind AS 103/110 Consolidation, Ind AS 36, and Costing.

Level: advanced
Languages: en → en
Cards: 32
Markdown: ICAI CA Intermediate & Final (Financial Reporting & Ind AS): Ind AS 115 Revenue, Ind AS 116 Leases, Ind AS 109 Financial Instruments, Consolidation & Costing (.md)

Flashcards (32)

#	Front (Term / Question)	Back (Definition / Answer)
1	Under Ind AS 2 (Inventories), how is Net Realisable Value (NRV) determined for Raw Materials when finished goods are sold at or above cost vs below cost?	Raw materials and supplies held for use in production are NOT written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. However, when a decline in the price of materials indicates that the cost of the finished products exceeds NRV, the materials are written down to their Replacement Cost.
2	Under Ind AS 20 (Accounting for Government Grants), how are Capital Grants (grants related to assets) presented in the Balance Sheet?	An entity can present grants related to assets in the balance sheet either: 1) By setting up the grant as Deferred Income (recognized in P&L on a systematic basis over the useful life of the asset), OR 2) By deducting the grant in arriving at the carrying amount of the asset (resulting in reduced depreciation charge over the asset's life).
3	In Standard Costing, how is Fixed Overhead Volume Variance decomposed into Efficiency, Capacity, and Calendar Variances?	Fixed Overhead Volume Variance = Absorbed FOH - Budgeted FOH = (Standard Hours for actual output - Budgeted Hours) x Standard FOH Rate per hour. It splits into: 1) Efficiency Variance = (SH - AH) x SR, 2) Capacity Variance = (AH - Revised Budgeted Hours) x SR, and 3) Calendar Variance = (Actual Days - Budgeted Days) x Standard Rate per day.
4	Under Ind AS 37 (Provisions, Contingent Liabilities and Contingent Assets), what are the three conditions for recognizing a Provision and how are Onerous Contracts treated?	A provision is recognized when: 1) An entity has a present obligation (legal or constructive) as a result of a past event, 2) It is probable (>50%) that an outflow of resources will be required, and 3) A reliable estimate can be made. For an Onerous Contract (where unavoidable costs exceed economic benefits), the provision is measured at the LOWER of the cost of fulfilling the contract and any compensation/penalties arising from failure to fulfill it.
5	Under Ind AS 110 (Consolidated Financial Statements), what are the three elements of 'Control' over an investee, and how are intra-group unrealized profits eliminated?	An investor controls an investee if and only if it has all three: 1) Power over the investee, 2) Exposure, or rights, to variable returns from its involvement, and 3) The ability to use its power to affect the amount of the investor's returns. Downstream unrealized profit is eliminated 100% against the Parent's share; Upstream unrealized profit is eliminated between Parent and NCI in their proportionate ownership shares.
6	Under Ind AS 33 (Earnings Per Share), how is Diluted EPS calculated and when are potential equity shares considered anti-dilutive?	Diluted EPS adjusts Basic EPS numerator (profit attributable to ordinary equity holders) for after-tax interest/dividends saved on dilutive potential ordinary shares, and adjusts the denominator for the weighted average number of shares that would be issued on conversion. Potential ordinary shares are ranked by incremental EPS (lowest to highest) and excluded if their inclusion increases EPS or decreases loss per share from continuing operations (anti-dilutive).
7	Under Ind AS 16 (Property, Plant and Equipment), how is a Decommissioning / Site Restoration liability accounted for at initial recognition and subsequently under Ind AS 37?	At initial recognition, the present value of estimated dismantling/restoration costs is capitalized into the cost of the PPE with a corresponding Provision under Ind AS 37. Subsequently, the PPE is depreciated over its useful life, while the unwinding of discount on the provision is recognized as a Finance Cost in Profit or Loss each year.
8	Under Ind AS 116 (Leases), how does a Lessee account for a lease at initial recognition, and what are the two recognition exemptions?	A lessee applies a single on-balance-sheet model: recognizes a Lease Liability (present value of unpaid lease payments discounted at the interest rate implicit in the lease or incremental borrowing rate) and a Right-of-Use (ROU) Asset. Exemptions (elective): 1) Short-term leases (lease term <= 12 months with no purchase option) and 2) Leases of low-value underlying assets.
9	Under Ind AS 36, can an impairment loss recognized in prior periods be reversed?	An impairment loss recognized for Goodwill SHALL NEVER be reversed in a subsequent period. For assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount, up to the carrying amount that would have been determined (net of depreciation) had no impairment been recognized.
10	Under Ind AS 115, how is Variable Consideration constrained, and how are Significant Financing Components treated?	Variable consideration (discounts, rebates, bonuses, penalties) is estimated using Expected Value or Most Likely Amount and included in transaction price ONLY to the extent that it is 'highly probable' that a significant reversal in cumulative revenue will not occur. Under the practical expedient, no adjustment for a financing component is required if the period between transfer of goods/services and payment is 1 year or less.
11	What are the three stages of the Expected Credit Loss (ECL) impairment model under Ind AS 109?	Stage 1 (Performing - no significant increase in credit risk since initial recognition): Recognize 12-month ECL and calculate effective interest on Gross Carrying Amount. Stage 2 (Underperforming - significant increase in credit risk): Recognize Lifetime ECL, interest on Gross Carrying Amount. Stage 3 (Credit-impaired): Recognize Lifetime ECL and calculate interest revenue on Net Carrying Amount (Gross minus loss allowance).
12	Under Ind AS 109 (Financial Instruments), what are the three classification categories for Financial Assets and the two tests used?	1) Amortised Cost (Business Model = Hold to Collect contractual cash flows AND SPPI test passed - Solely Payments of Principal and Interest), 2) FVTOCI (Business Model = Hold to Collect and Sell AND SPPI passed; or irrevocable election for non-trading equity investments), 3) FVTPL (residual category, including derivatives and trading equity).
13	Under Ind AS 36 (Impairment of Assets), how is the Recoverable Amount defined and in what order is an impairment loss allocated to a Cash-Generating Unit (CGU)?	Recoverable Amount is the HIGHER of an asset's Fair Value less Costs of Disposal (FVLCD) and its Value in Use (VIU - present value of future pre-tax cash flows). CGU impairment loss is allocated first to reduce the carrying amount of any Goodwill allocated to the CGU, and then pro-rata to the other assets of the CGU based on their carrying amounts (never reducing an asset below the highest of its FVLCD, VIU, or zero).
14	In Throughput Accounting (Goldratt's Theory of Constraints - TOC), how are Throughput Contribution and the Throughput Accounting Ratio (TA Ratio) calculated?	Throughput Contribution = Sales Revenue - Totally Variable Cost (normally ONLY Direct Material Cost; all labor and overheads are treated as Fixed Operating Expense). Return per Factory Hour = Throughput Contribution / Time on Bottleneck Resource; Cost per Factory Hour = Total Factory Operating Expense / Total Time available on Bottleneck; TA Ratio = Return per Factory Hour / Cost per Factory Hour (target > 1).
15	In Strategic Cost Management (Transfer Pricing), what is the general minimum and maximum Transfer Price formula when the supplying division has spare capacity vs full capacity?	Minimum Transfer Price (set by supplying division) = Marginal Cost per unit + Opportunity Cost per unit (lost contribution on external sales foregone). Under spare capacity, Opportunity Cost = 0, so Min TP = Marginal Cost; under full capacity, Min TP = Market Price (less any selling cost savings). Maximum Transfer Price (set by buying division) = lower of external market purchase price or Net Realisable Value of final product less own processing costs.
16	In Standard Costing, what are the formulas for Direct Material Cost, Price, Usage, Mix, and Yield Variances?	Material Cost Variance (MCV) = (SQ x SP) - (AQ x AP); Material Price Variance (MPV) = (SP - AP) x AQ; Material Usage Variance (MUV) = (SQ - AQ) x SP; Material Mix Variance (MMV) = (RSQ - AQ) x SP (where RSQ is Revised Standard Quantity); Material Yield Variance (MYV) = (SQ - RSQ) x SP.
17	Under Ind AS 105 (Non-current Assets Held for Sale and Discontinued Operations), how is an asset classified as 'Held for Sale' measured and depreciated?	An asset (or disposal group) classified as Held for Sale (available for immediate sale in its present condition and sale is highly probable within 12 months) is measured at the LOWER of its Carrying Amount and Fair Value less Costs to Sell, and Depreciation on such assets CEASES from the date of classification.
18	In CA Final AFM (Portfolio Management & Derivatives), what are the Capital Asset Pricing Model (CAPM) formula and Put-Call Parity theorem for European options?	CAPM Expected Return: E(R_i) = R_f + Beta_i * [E(R_m) - R_f], where Beta_i = Cov(i, m) / Var(m). Put-Call Parity (for European options on a non-dividend paying stock with strike K and maturity T): Call + K * e^(-rT) = Put + S_0.
19	In CA Final Advanced Financial Management (AFM), how is Free Cash Flow to Firm (FCFF) vs Free Cash Flow to Equity (FCFE) calculated and discounted?	FCFF = EBIT(1 - t) + Depreciation/Non-cash charges - Capital Expenditure - Change in Non-Cash Working Capital (discounted at WACC to find Enterprise Value). FCFE = FCFF - Interest(1 - t) + Net Borrowing, or Net Income + Depreciation - CapEx - Change in Non-Cash WC + Net Borrowing (discounted at Cost of Equity Ke to find Equity Value directly).
20	Under Ind AS 23 (Borrowing Costs), how are Specific Borrowings and General Borrowings capitalized on a Qualifying Asset?	For Specific Borrowings: Capitalize actual borrowing costs incurred during the period LESS any investment income earned on the temporary investment of those borrowings. For General Borrowings: Apply the Capitalization Rate (weighted average borrowing cost of general borrowings) to the weighted average expenditure incurred on the qualifying asset.
21	Under Ind AS 108 (Operating Segments), what are the three quantitative thresholds (the 10% and 75% rules) for identifying Reportable Segments?	An operating segment is reportable if it meets any of the 10% thresholds: 1) Reported revenue (external + intersegment) >= 10% of combined revenue of all segments, 2) Absolute reported profit/loss >= 10% of the greater of combined profit of profitable segments or combined loss of loss-making segments, or 3) Segment assets >= 10% of combined assets. Furthermore, total external revenue reported by operating segments must constitute at least 75% of the entity's total revenue.
22	Under Ind AS 109 and Ind AS 32, how is a Compound Financial Instrument (such as a convertible debenture with a fixed-for-fixed conversion option) accounted for by the issuer?	Split Accounting is applied: First, measure the Financial Liability component as the present value of contractual cash flows discounted at the market interest rate for a similar non-convertible debt instrument; Second, assign the residual amount (Issue Proceeds minus Liability Component) to the Equity Component (which is never subsequently remeasured).
23	Under Ind AS 102 (Share-based Payment), how do Equity-Settled and Cash-Settled (SARs) share-based payment transactions differ in measurement?	Equity-Settled (ESOPs): Measured at the Fair Value of the equity instruments at the GRANT DATE, recognized over the vesting period with a credit to 'Share Options Outstanding Account' (Equity), and NOT remeasured for subsequent changes in market price. Cash-Settled (Share Appreciation Rights - SARs): Measured at the Fair Value of the liability and REMEASURED at each reporting date and settlement date through Profit or Loss.
24	Under Ind AS 116, how is a Sale and Leaseback transaction accounted for when the transfer of the asset satisfies vs does not satisfy Ind AS 115 as a sale?	If the transfer IS a sale under Ind AS 115: the seller-lessee measures the ROU asset at the proportion of the previous carrying amount that relates to the right of use retained (Carrying Amount x PV of Lease Payments / Fair Value) and recognizes only the gain/loss relating to the rights transferred to the buyer-lessor. If NOT a sale: treated as a financing transaction under Ind AS 109.
25	Under Ind AS 12 (Income Taxes), what is the Balance Sheet approach for Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)?	Compare the Carrying Amount (CA) of an asset/liability in the Balance Sheet with its Tax Base (TB). For an Asset: if CA > TB -> Taxable Temporary Difference -> recognize DTL; if CA < TB -> Deductible Temporary Difference -> recognize DTA (to the extent probable that future taxable profit will be available). For a Liability, the signs reverse.
26	Under Ind AS 115, what are the three criteria under which an entity recognizes revenue 'over time' rather than 'at a point in time'?	Revenue is recognized over time if any ONE of these is met: 1) Customer simultaneously receives and consumes the benefits as the entity performs, 2) The entity's performance creates or enhances an asset that the customer controls as it is created, or 3) Performance does not create an asset with an alternative use to the entity AND the entity has an enforceable right to payment for performance completed to date.
27	In Activity-Based Costing (ABC), how do Unit-level, Batch-level, Product-sustaining, and Facility-sustaining activities differ?	Unit-level: performed for each unit produced (machine hours, direct energy); Batch-level: performed for each batch regardless of units in the batch (machine setups, purchase orders, inspection); Product-sustaining: performed to support a product line (product design, engineering change notices); Facility-sustaining: general factory administration/rent.
28	Under Ind AS 19 (Employee Benefits), where are the components of Defined Benefit Cost (Service Cost, Net Interest, and Remeasurements/Actuarial Gains & Losses) recognized?	Current Service Cost, Past Service Cost, gains/losses on settlement, and Net Interest on the net defined benefit liability (asset) are recognized in Profit or Loss. Remeasurements of the net defined benefit liability (including actuarial gains and losses and return on plan assets excluding amounts in net interest) are recognized in Other Comprehensive Income (OCI) and are NEVER reclassified to P&L.
29	Under Ind AS 103 (Business Combinations), how is Goodwill or Bargain Purchase calculated, and what are the two options for measuring Non-Controlling Interest (NCI)?	Goodwill = Consideration Transferred + NCI + Acquisition-date Fair Value of previously held equity interest - Net Identifiable Assets Acquired (at Fair Value). NCI can be measured on a transaction-by-transaction basis at either: 1) Fair Value (Full Goodwill method), or 2) Proportionate share of the acquiree's identifiable net assets (Partial Goodwill method). Bargain purchase gain is credited directly to OCI and accumulated in Capital Reserve.
30	Under Ind AS 21 (The Effects of Changes in Foreign Exchange Rates), how are Monetary vs Non-Monetary items translated at the reporting date?	Foreign currency Monetary items (cash, receivables, payables, loans) are translated using the Closing Rate (exchange gains/losses go to P&L); Non-monetary items measured at historical cost (PPE, inventory at cost) are translated using the exchange rate at the date of transaction; Non-monetary items measured at fair value use the rate at the date when fair value was determined.
31	In CA Cost & Management Accounting (Marginal Costing & CVP Analysis), what are the formulas for P/V Ratio, Break-Even Point (BEP), and Margin of Safety (MOS)?	Contribution = Sales - Variable Cost; P/V Ratio = (Contribution / Sales) x 100 = (Change in Profit / Change in Sales) x 100; Break-Even Point (in Rs.) = Fixed Cost / P/V Ratio; Margin of Safety (in Rs.) = Actual Sales - BEP Sales = Profit / P/V Ratio; Operating Leverage = Contribution / EBIT.
32	What is the 5-Step Model for revenue recognition under Ind AS 115 (Revenue from Contracts with Customers)?	Step 1: Identify the contract(s) with a customer; Step 2: Identify the separate performance obligations; Step 3: Determine the transaction price; Step 4: Allocate the transaction price to the performance obligations (based on standalone selling prices); Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.