QUESTION 55 Illustration 55 A Limited is in the business of the infrastructure and has two divisions under the same; I) Toll Roads and II) Wind Power. The brief details of these business and underlying project details are as follows: I. Bhilwara-Jabalpur Toll Project - The Company has commenced the construction of the project in the current year and has incurred total expenses aggregating to $ 50 million as on 31st December 2018. Under IGAAP, the Company has 'recorded such expenses as Intangible Assets in the books of account. The brief details of the Concession Agreement are as follows: • Total Expenses estimated to be incurred on the project $ 100 million; • Fair Value of the construction services is $ 110 million; • Total Cash Flow guaranteed by the Government under the concession agreement is $ 200 million; • Finance revenue over the period of operation phase is $ 15 million: • Other income relates to the services provided during the operation phase. II. Kolhapur-Nagpur Expressway -The Company has also entered into another concession agreement with Government of Maharashtra in the current year. The construction cost for the said project will be $ 110 million. The fair value of such construction cost is approximately $ 200 million. The said concession agreement is Toll based project and the Company needs to collect the toll from the users of the expressway. Under IGAAP, A Limited has recorded the expenses incurred on the said project as an Intangible Asset. Required a) What would be the classification of Bhilwara-Jabalpur Toll Project as per applicable IFRS? Give brief reasoning for your choice. b) What would be the classification of Kolhapur-Nagpur Expressway Toll Project as per applicable IFRS? Give brief reasoning for your choice. c) Also, suggest suitable accounting treatment for preparation of financial statements as per IFRS for the above 2 projects