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Under Ind AS 101, an entity's ESTIMATES under Ind AS at the date of transition must be:
AConsistent with estimates made under previous GAAP at the same date (after adjustments for accounting policy differences), unless there is OBJECTIVE EVIDENCE that those previous estimates were in error
BReset to nil and recalculated based on transition-date conditions
CMade freshly using all information available at the transition date
DAdopted from the latest peer-company benchmark in the industry
Answer & Solution
Correct answer: A. Consistent with estimates made under previous GAAP at the same date (after adjustments for accounting policy differences), unless there is OBJECTIVE EVIDENCE that those previous estimates were in error
Para 14 + Appendix B — the estimates exception is mandatory: use previous-GAAP estimates as the starting point (adjusted only for accounting-policy differences), unless objective evidence indicates the previous estimate was in error. The standard prohibits hindsight — entities cannot revise estimates with the benefit of later-known outcomes. This applies to provisions, useful lives, fair values estimated at transition date, etc.
Related questions
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