1. CASE STUDY ON IFRS 1
MANDATORY EXEMPTIONS - ESTIMATES
Vamsidhara Ltd has a reporting date of 31 March 2012 for its first IFRS
Financials and includes comparative information for one year. In its previous
GAAP financial statements for 31 March, 2011:
I. Estimated provision for warranty of Rs.10 million which
was considered as appropriate based on past experience. In
preparing its first IFRS financial statements, Vamsidhara
Ltd concluded that its estimates under previous GAAP at 31
March 2011 were made on a basis consistent with its
accounting policies under IFRSs. It also concluded that its
estimates were reasonable and that, therefore, no error had
occurred.
II. Pension benefit plan was accounted for under cash basis.
III. Did not recognize a liability under Indirect tax laws as it
does not consider that an obligation had arisen. The
litigation was included as an item of contingent liability. The
litigation was resolved by arbitration on 1 August, 2011 and
Vamsidhara Ltd agreed to pay Rs.0.1 million.
How should Vamsidhara Ltd consider these items while preparing the
opening balance sheet under IFRSs on the transition date of 01 04 2010?