S1: Ind AS 109 deals with Financial Instruments. S2: Ind AS 113 deals with Fair Value Measurement. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Ind AS 109 deals with Financial Instruments. S2: Ind AS 113 deals with Fair Value Measurement. Which statement(s) is/are correct?
A. S1 only
B. Both S1 and S2
C. Neither S1 nor S2
D. S2 only
Answer: Option B
Solution (By JKSSB Mock Tests)
Ind AS 109 prescribes the requirements for the recognition, measurement, impairment, derecognition, and hedge accounting of financial instruments. Ind AS 113 defines fair value and sets out its measurement framework. Both are correct.
Assertion (A): Under Ind AS 21, the functional currency of an entity is the currency of the primary economic environment in which the entity operates. Reason (R): The presentation currency can be different from the functional currency, and financial statements can be translated into any currency for presentation. Choose the correct option.
A.A is false but R is true
B.Both A and R are true and R is the correct explanation of A
C.A is true but R is false
D.Both A and R are true but R is NOT the correct explanation of A
Explanation:
Both statements are correct as per Ind AS 21. The functional currency is based on the primary economic environment. The presentation currency is just the currency in which the financials are displayed, and it can be different from the functional currency. R does not explain A; they are two separate concepts.
S1: Under Ind AS 115, a contract with a customer can be combined with another contract and accounted for as a single contract if they are negotiated as a package with a single commercial objective. S2: If the amount of consideration in one contract depends on the price or performance of the other contract, they must be combined. Which statement(s) is/are correct?
Explanation:
Both statements are correct as per Ind AS 115. Contracts must be combined if they are part of a single commercial package, or if the consideration in one depends on the other, or if the goods/services are a single performance obligation.
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