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Identify the statement on the OPTIONAL concentration test in Ind AS 103 that is INCORRECT.
AOnce an entity has elected the concentration test for one transaction, it must apply it to every subsequent transaction in the same year
BThe test is applied on a transaction-by-transaction basis at the entity's option
CChoosing to apply the test does not preclude a later full assessment under the definition of business
DIf substantially all of the FV of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the deal is treated as an asset acquisition
Answer & Solution
Correct answer: A. Once an entity has elected the concentration test for one transaction, it must apply it to every subsequent transaction in the same year
The election is per transaction — not a policy choice applied consistently for the year. Statements A, B and C correctly restate the standard (transaction-by-transaction option, no bar on full assessment, and the operative outcome that 'substantially all in one identifiable asset' indicates an asset acquisition).
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