Answer all the MCQ's :

Compute treatment related to share based payment to be included under Profit and loss , comprehensive income and statement of financial position at 31 March 2020(4 Marks)

Build well Ltd. is a diversified business group operating in multiple business segments across the world . It maintains its books of accounts and publishes its annual consolidated financial statements under International Financial Reporting Standards.

The central finance team has been working on closing the books of accounts and generating consolidated financial statements for the year ended 31 March 2019. You are the Finance Controller and your assistants want your views for finalization of financial statements .

On 1 April 2018, Build well Ltd. completed the manufacture of some inventory at a total cost of8,00,000. In order to be suitable for sale in the ordinary course of business, the completed inventory needed to be storedin controlled conditions for a two-year period. The inventory is expected to sell for 2,00,000 after the two- year storage period. On the same day, Build well Ltd. sold the inventory to Black Ltd., a bank for ` 8,10,000. For this sale, Black Ltd. charged Build well Ltd. an administration fee of 10,000. Build well Ltd. retained physical custody of the inventory and ensured that the inventory is stored in the appropriate conditions.

As per the agreement with Black Ltd., Build well Ltd. would indemnify BlackLtd. against anylosses causedby theft or inappropriate storage of the inventory. Build well Ltd. hasthe option torepurchase the inventory on 31 March 2020 for ` 933,120. On 1 April 2018, Black Ltd. would have required an annual return of 8% on loans made to customers such as Build well Ltd.

OneofthedirectorsofBuild wellLtd., Mr.BenJoneshasinformedCentralFinanceteamthaton1 January 2019, his spouse acquired a controlling interest in one ofBuild wellLtd.'smajorsuppliers, Candour Ltd.

Mr. Jones seemed to think that this would have implications on the financial statements of Build well Ltd. However, your assistant in Central Finance is not clear about its implications/treatment while finalizing the financial statements.

Buildwell Ltd. has been purchasing goods from Can dour Ltd.` 15 million permonth of the year ended31 March 2019. As per the financial statements of Buildwell Ltd., this is a significant amount. While checking all the purchase transactions it was found that all the purchases from Candour Ltd. were made at normal market rates.

On 1 April 2018, Build well Ltd. had also leased a machine from Donovan Ltd. on a three-year lease. The expected future economic life of the machine on 1 April 2018 was eight years. If the machine breaks down, then under the terms of the lease, Donovan Ltd. would be required to repair the machine or provide a replacement.

Donovan Ltd. agreed to allow Build well Ltd. to use the machine for the firstsix months of the leasewithoutthe payment of any rental as an incentive to Buildwell Ltd. to sign the lease agreement. After this initialperiod, lease rentals of`210,000 werepayablesix-monthlyinarrears, thefirst payment falling dueon31 March 2019.

On 1 June 2018, Build well Ltd. decided to dispose of the business and current and non -current assets of one of its divisions related to Specialty chemicals business which it had acquired several years ago. This disposal doesnotinvolveBuild wellLtd.withdrawingfromaparticularmarketsector.Thecarryingvalueson1 June 2018 of the assets to be disposed of were as follows:

Particulars Million

Goodwill 10.0

Property, Plant and Equipment 20.0

Patents and trademarks 8.0

Inventories 15.0

Trade Receivables 10.0

None of the assets of the business had suffered impairment as at 1 June 2018. At that date the inventoriesand trade receivables of the business were already stated at no more than their recoverable amounts.

Build well Ltd. offered the business for sale at a price of ` 465 million, which was considered to be reasonably achievable. Build well Ltd. estimated that the direct costs of selling the business would be ` 5,00,000. These estimates have not changed since 1 June 2018 and Build well Ltd. estimates that the business will be sold by 31 March 2019 at the latest.

\f