Financial Reporting (Ind AS)Question 5825 of 11
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Under Ind AS 109 'Financial Instruments', an investment in equity shares not held for trading can be irrevocably designated at initial recognition to be measured at:

Options

AFair Value through Other Comprehensive Income (FVTOCI) without subsequent reclassification to P&L.
BAmortized Cost using effective interest rate method.
CFair Value through Other Comprehensive Income (FVTOCI) with recycling to P&L on derecognition.
DCost less impairment.
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Correct Answer

✅ Option A — Fair Value through Other Comprehensive Income (FVTOCI) without subsequent reclassification to P&L.

All Options:

  • AFair Value through Other Comprehensive Income (FVTOCI) without subsequent reclassification to P&L. ✓
  • BAmortized Cost using effective interest rate method.
  • CFair Value through Other Comprehensive Income (FVTOCI) with recycling to P&L on derecognition.
  • DCost less impairment.

Detailed Solution & Explanation

Correct Answer: Option **A** Explanation: Under Ind AS 109 Paragraph 5.7.5, an entity may make an irrevocable election at initial recognition for particular investments in equity instruments that would otherwise be measured at FVTPL to present subsequent changes in fair value in OCI. Amounts recognized in OCI are NOT subsequently transferred to profit or loss (no recycling), though cumulative gain or loss may be transferred within equity (e.g. to Retained Earnings).

More Questions from Financial Reporting (Ind AS)

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In a business combination under Ind AS 103, how should acquisition-related transaction costs (e.g., legal fees, due diligence costs) incurred by the acquirer be accounted for?

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Under Ind AS 36 'Impairment of Assets', an impairment loss is recognized whenever the carrying amount of an asset or cash-generating unit exceeds its:

Which of the following is a key feature of Ind AS?

What is the primary objective of consolidation of financial statements?

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