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An entity recognises an inventory write-down to NRV ₹50,000 in Q2; in Q4, NRV recovers and the entire write-down is reversed. Under Ind AS 34:
AThe write-down is reversed against retained earnings
BThe Q2 write-down is recognised in Q2; the Q4 reversal is recognised in Q4 — interim figures are NOT restated and a 'true-up' is not done at year-end
CThe Q2 write-down should be reversed retrospectively in Q2 figures
DBoth write-down and reversal are deferred to year-end
Answer & Solution
Correct answer: B. The Q2 write-down is recognised in Q2; the Q4 reversal is recognised in Q4 — interim figures are NOT restated and a 'true-up' is not done at year-end
Ind AS 34 recognises and measures at the interim period; subsequent reversals are reported when they occur. The annual figure shows zero net write-down, but each interim period reflects its true facts at that time. Restatement of prior interim periods is NOT done.
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