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Under Ind AS 109, a SHARE BROKING company holds shares for short-term trading. These shares are accounted as:
AInventory under Ind AS 2 — they are purchased for resale in ordinary course
BIntangible asset under Ind AS 38 — securities are economic rights
CPPE under Ind AS 16 — they are stocked for operations
DFinancial assets under Ind AS 109 (recognition + measurement) and Ind AS 32/107 (presentation/disclosure) — measured at FVTPL because they are held for trading; NOT inventory under Ind AS 2
Answer & Solution
Correct answer: D. Financial assets under Ind AS 109 (recognition + measurement) and Ind AS 32/107 (presentation/disclosure) — measured at FVTPL because they are held for trading; NOT inventory under Ind AS 2
Para 1 of Ind AS 2 excludes financial instruments from its scope. Trading shares fall under Ind AS 109 (held-for-trading → FVTPL by classification), with presentation per Ind AS 32 and disclosure per Ind AS 107. The fact that they are held for sale in the broking company's ordinary course doesn't move them into Ind AS 2 — the financial-instruments standards win.
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