Case Study Infosys is an IT and management consulting services provider. The firm has offices and presences over 50 countries in the world. It is one of the biggest IT consulting firm in South Asia. In Pakistan it has recently encouraged by acquiring a Pakistan based IT Solution Company named Red Math. Given the quantum of Infosys operations and revenue it is going to be listed on Pakistan Stock Exchange. The Red Math company is now going to represent the Infosys international; previously it existed as a private limited company. This transformation will eventually bring out drastic changes in the reporting framework of Red Math. You are a member of the corporate regulatory body appointed to direct entities like these for incorporating the essential reporting framework clauses into their financial statement. Red Math through their auditors has requested you for the guidance in the matter stated below. Kindly state your opinion with reference to the appropriate International Financial Reporting Standard citation. a) Red Math Company has spent PKR 2.5 million in previous three years on the physical fitness of its employees and was treated as an entertainment expense that equated to their perks. Infosys core policy is mandatory fitness of its employees. The Infosys will require this cost to be classified as a necessary core business expense. b) Red Math Company provided cabling and wiring services to the Nandi-Pur Power Project in 2008, which amounted to invoicing of PKR 7.5 million. The project due to delays was considered to be terminated, but the amount still remained in the receivables of the Red Math. The project revived by current government recently, whereby the Red Math company has again taken up the matter of the previous service rendered and the payment due from the project. The current administration is a bit hesitant to process any claim pertaining to the previous tenure due to political reasons. The amount is still appearing in receivables of the Red Math. c) Red Math operates a segment Hardware trouble shooting and problem solving (contributing 12% to the revenue). Infosys worldwide has outsourced its hardware maintenance to another company. On the same rule, Infosys has directed Red Math to outsource the said division to NCR Pakistan. The equipment existing in the inventory will be retained but will be reclassified as indirect consumables, previously classified as Tools and Equipment.