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Under Ind AS 101, the derecognition requirements of Ind AS 109 apply:
APROSPECTIVELY for transactions occurring on or after the date of transition — past derecognitions (e.g., securitisations) under previous GAAP are NOT reversed even if they wouldn't qualify for derecognition under Ind AS 109
BRetrospectively to all historical derecognitions
COnly to derecognitions involving financial liabilities, not financial assets
DOnly to derecognitions in the first Ind AS reporting period
Answer & Solution
Correct answer: A. PROSPECTIVELY for transactions occurring on or after the date of transition — past derecognitions (e.g., securitisations) under previous GAAP are NOT reversed even if they wouldn't qualify for derecognition under Ind AS 109
Mandatory exception — Ind AS 109 derecognition rules are PROSPECTIVE from the transition date. Past securitisations or other transfers that derecognised an asset under previous GAAP are NOT brought back on the books even if Ind AS 109 would have required continuing recognition (e.g., failed risk-and-rewards test). Optional retrospective application is permitted from a date of the entity's choosing, provided the historical info was obtained at the time.
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