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Applicable Ind AS?

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Sumit Shukla

265 Points Posted on 12 January 2021

1. Company engaged in large scale manufacturing and renting of machinery. Which Ind AS will apply to this machinery.

2. Above company purchases 1 Lacs Screws for Rs.10 crore at Rs. 1000 each. This screws are used in Machinery manufacturing. Which Ind As shall apply in this cas

Replies (6)

Quick Summary

This discussion explores the applicable Indian Accounting Standards (Ind AS) for a company involved in large-scale machinery manufacturing and renting. It questions whether machinery and components like screws should be classified as inventory, investment property, or Property, Plant, and Equipment (PPE). The conversation touches upon Ind AS 116 for leases, Ind AS 23 for borrowing costs, and Ind AS 2 for inventory, ultimately suggesting Ind AS 16 for PPE when not held for sale.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 12 January 2021

For renting of machinery Ind AS 116 Leases will applicable

If company takes loan for purchase then Ind AS 23 Borrowing will applicable otherwise Ind AS 2 Inventory will be applicable

Sumit Shukla

265 Points Posted on 12 January 2021

I mean what this machinery and Screws will be considered it can't be considered as inventory as it's not for sale. Only is its is for regular sale then it will be covered Under Ind as 2