Seda | Consolidated Financial Statements Ind AS 27, 28, 103, 110, 111, 112 Part 1: Calculations Question 1 Ram Lid. acquires Shyam Ltd. by purchasing 60% of its equity for value of non-controlling interest is determined as 10 lakh. The h in cash. The fair ate value of [Gentifable assets and labilties, as measured in accordance with Ind AS 108 is delermined na te lakh, How much goodwill is recognized based on two:méasuretent bases of r olling interest (NI)? (Study Material) Answer A. NCI is measured at NCI’s proportionate share of the acquiree’s identifiable net assets Ram Ltd, recganizss 100% of the identifiable net assets on the acquisition date and decides to measure NCI at proportionate share.(40%) of Shyam Ltd. identifiable net assets, Ine Joumal entry fecorded én the acquisition date for the 60% interest acquired is as folows (in lakhs): Dr. (@in tok) Cx (inten Identifiable net assets Dr. 5 Goodwill (Balancing figure) Dr 12 To Cash | 15 To NCI | 2 fapn SS lakh x 40%) = & 2 lakh. Hence, goodwill of € 12 lakh is calculated as consideration €15 lakh plus NCIX 2 lakh less identifiable net assets and liabilities @ 5 lakh, {The goodwill recognized under Ind AS 103, therefore, represents entity A's 60% share of the total Scr attributable to Shyam Ltd. It does not include any amount of goodwill attributable to 40sec Nel B. NCI is measured atfair value Ihe facts are as above, but Ram Ltd decides to measure NCI at flr value rather than at its share of identifiable net assets.878 Chap. 14 © Consolidated Financial Statements ind AS 27, 28, 403, 149 fe fet Value of NCI is determined as F 10 lakh (given in the question), which is the sa {alr value on a per-share basis of in Purchased interest, The acquirer recognizes at the acqui ition date {100% ofthe identitable net assets (ii) NCl at fair value, ang (ii) Gooawit [;he joumal entry recorded on the Scquisition date for the 60% interest acquired is as lakhs): [De ein taxny Cr in aka or. | 5 Or, 'dentifiable net assets Goodwill (Batancing figure) } 2 eee —|___ etefore, goodwil recognized where INClis measured at fair value ag er Ind AS 103 repm ihe group's share to total goodwin attributable to Shyam Lt@. and tre NCI's share o Geedwill attributable to Shyam Lita ere hn Question 2 Sesta Ltd. acquires Geeta’ lit by purthasing 70% of iis quity for @ 15 lakh in cash Yaiue of NCI is deteritined ase 6 ere Managemtient have elected to adopt full goodwill mm and to.measure NChat fair vais ndard i evalu of the identifiable assets ove! asiMeasured in accordance w “fandard is determined as % 22 lai (Tax conse ING Taoree) fi Answer The, Bargain purchase gain is o Iculated as follow Fair value of consideration transferred Fair value of NC} Fair value of previously held equity interest | [ess: Recognised vaiue of 100% ‘he Net identifiable assets, measured in| accordance with the standards Gain on bargain purchase (4 par assets Is greater than the fair value The recognized amount of the identifable I roe scrallon transferred plus fair value or NCI. Therefore, a bargain purchane gain of & 0. 'S recognized in income statementChap. 14 « Consolidated Financial Statements Ind AS 27, 28, 103, 110, 114, 112 879 The journal entry recorded on the acquisition date for 70% interest is as follows: (Cin lakh) | Cr. @in lakh) Identifiable net assets 22.00 To Gash 15.00 To Gain on bargain purchase 0.10 ToNCI 6.90 Since NCI is required to be recorded at fair value, a bargain purchase is recognized for € 0.1 lakh. Re a Question 3 Continuing the facts as stated in the above illustration, except that Seta Ltd..chooses to measure NCI using a proportionate share method for this business combination. (Tax equences have been ignored). This method calculates the bargain purchase same as under the fair value matfiod, except that Cl is measured as the proportionate share of the identifiable net assets e bargain purchase gain is as.follo | (in takh) air value of consideration wansterre 15.00 | Fair value of NCI (30% of € 22:0 lak) 6.60 Fair value of previously héldCequity interest NIA 21.60 Less: Recognised value of 100% of the net identifiable assets, measured in| (22.00) ‘cordance with the standards ain on bargain pure As the recognized amount of the identifiable net assets is greater than the fair sideration transferred, plus the recognized amount of NCI (at proportionate share), @ bargain ;chase gain of ¥ 0.4 lakh is recognized in the income statement. The journal entry recorded on the acquisition date for 70% interest is as follows: I Dr.(€in lakh) | Cr. (in lakh) éentifiable net assets Dr, 22.0 To Cash 15.0 To Gain on bargain purchase 04 ToNCI 66 inder the proportionate share method, NCI is recorded at its proportionate share of its net entifiable assets and not at fair value. kk880 Chap. 14 Consolidated Financial Statements Ind AS 27, 28, 103, 110, 111 Question 4 X Ltd, acquired Y Ltd. on payment of € 25 crore cash and transferring a retail business, the value of which is € 15 crore, Assets acquired and liabilities assumed in the acquisition are % 36 crore. Find out the Goodwi Answer i (All figures are & Fair value of the consideration paid (& 25 or + € 15 cr) Fair value of assets acquired net of fair value of liabilities assumed Goodwill Pictiniit ove Question 5 Raja Ltd. purchased 60% shares of Ram Ltd. paying & 525 lakh. Number of issued capital of Ram Lid. is 1 lakh. Fair value of identifiable assets of Ram Ltd. is ® 640 lakh and that of liabilities i ® 50 lakh, As on the date of acquisition, market price per share of Ram Ltd. is ¥ 775. Find out the value a goodwill (Study Mate Answer sz (Fin take (i) Fair value of consideration (i) Fair value of non-contfoling interest (40% x 1 lakh x &'775) Fic yalle’of ide! Léss; Fair Value of liabilities, | Fait.value’of Net ldéntitied Assets (B) Goodwill ((A)= (B)] Note! When goodwill is measured taking non-controlling interest at fair value, itis often termed =e full goodwill On the other hi assets. [iis (i) Fair value of consideration paid Proportionate value of non-controlling interest (40% x 590 lakh) Fair value of identified assets Minus fair value of liabilities Fair value of Net assets (B) Goodwill (A)-(8)]0,111,112 ness, the fair | Goodwil fudy Material) in crore) 40 (38) 4 al of Ram ties is © © value of dy Material Fein tak | 625 Chap. 14 « Consolidated Financial Statements Ind AS 27, 28, 103, 110, 111, 112 881 When non-controliing interest is measured at proportionate share of net asset, the goodwill is popularly termed as partial goodwill x ek ok Question 6 Entity D has a 40% interest in entity E. The carrying value of the equity interest, which has been ‘accounted for as an associate in accordance with IND AS 28 is %40 lakh. Entity D purchases the remaining 60% interest in entity E for 600 lakh in cash. The fair value of the 40% previously held equity interest is determined to be 400 lakh., the net aggregate value of the identifiable assets and liabilities measured in accordance with Ind AS 103 is determined to be identifiable %880 lakh ‘The tax consequences have been ignored. How does entity D account for the business ‘combination? (Study Material) Answer Entity D recognizes at the acquisition date: (i) 100% of the identifiable net assets. (i) Goodwill as the excess of 1 over 2 below: The aggregate of: + Consideration transferred +. The amount of any fon controlling interest (Not applicable in this example) combination attiieved in stages, the acquisition date fair value of viously held equity interest in the acquire. 2. The assets and the liabilities recognized in accordance with Ind AS 103. The journal entry recorded on the date of acquisition of the 60% controlling interest is as follows: ‘Consolidated Statement - Journal Dr. cr. i |(¢ in takh) (& in lakh) identifiable net assets Dr.| 880 Goodwill | pr. | 120 To Cash 600 To Associate interest 40 | To Gain on equity interest (to be recognized in inc 360 | statement) J} Goodwill is calculated as follows: Fair value of consideration transferred Fair value of previously held equity interest Less: Recognised value of 100% of the identifiable net assets, measured in| (880) accordance with the standards Goodilrecognised [a0Chap. 14 # Consolidated Financial Statements Ind AS 27, 28, 103, 1 he gain on the 40% previously held equity interest is recognized in the income state {air value of the previously held equity interest less the carrying value of the previously h interest is ¥ 360 lakh (400 — 40). Cie RIHICE Question 7 A Lid, acquired 70% of equity shares of B Ltd. on 1,04.20X1 at cost of & 10,00,000 when hrad an equity share capital of ® 10,00,000 and other equity of ¢ 60,000. In the four e years B Ltd. fared badly and suffered losses of € 2,50,000, ¢ 4,00,000, & 5,00,000 and ¢ ¢ mecpectively. Thereafter in 20X5-20X6, B Ltd. experienced turnaround and registered a Profit of ® 0,000. In the next two years i.e. 20X6-20X7 and 20X7-20X8, B Lta, recor Profits of © 1,00,000 and ¥ 1,50,000 respectively. Show the non- controlling intereste Control at the end of each year for the purpose of consolidation, Assume that the assets are at fair value. Answer Year Profitiloss Non-| Additional | NCI's share controlling | Consolidated of losses Interest borne by A Ltd. © | Balance | Atthe time of 3,24,000 acquisition in (WN) 20xXi 20x1-20x2 2150,000) 75,000), 175,000) | 12.000 2038 20%4 (6.00000) [120000] (260.000 (e000 | 20%4.20x5 (4.20000)| 6.000)| (24.000) | (67.000) (20X5-20X6 5 0 15,000 | 35,000 | | 20x6-20x7 100,000 | __ 30,000 70,000 (12,000) 33,000 |Chap. 14 » Consolidated Financial Statements Ind AS 27, 28, 103, 110, 114, 112 883 Working Note: Calculation of Non-controlling interest: z Share Capital 10,00,000 Other equity 80,000 Total 10,80,000 30% « 10,80,000) | 3,24,000 Nel NCI is measured at NCI's proportionate share of the acquiree’s identifiable net assets. (Considering the carrying amount of share capital & other equity to be fair value] Calculation of Goodwill! cost of control: x Consideration +10,00,000 Non-controlling interest 3,24,000 Loss: Net Assets (10,80,000) | Goodwin 2,44,000 Question 8 From the followin; (1) Non-co ition and at the date of consolidation using proportionate share method: (2) Goodwill or Gain on bargain purctias (3) Amaunt of holding company’s profit in the consolidated Balance Sheet assuming holding company's own fetained eamings to be ¥ 2,00,000 in each case Case Subsidiary eof Cost _Date of Acquisi Consolidation date company shares 1.04.20%1 31.03.20x2 ‘owned Share Retained Share_—Retained Capital earnings Capital earnings | (Al (e) Ic 1) A 90% 1,40,000 1,00,000 50,000 1,00,000 70,000 85% 1,04,000 1,00,000 30,000 1,00,000 20,000 c 56,000 50,000 20,000 $0,000 20,000 D 100% 1,00,000 50,000 40,000 50,000 _—_—§5,000 The company has adopted an accounting policy to measure Non-controlling interest at NCI's proportionate share of the acquiree’s identifiable net assets. (Study Materi884 Answer Chap. 14 © Consolidated Financial Statements Ind AS 27, 28, 103, 110, 4 (1) Non- controlling Interest = the equity in a subsidiary not attributable, directly or toa parent. Equity is the residual interest in the assets of an enterprise after de its liabilities i.e. in this given case Share Capital + statement of Profit & Loss (As to be the Net aggregate value of identifiable assets in accordance with Ind AS h % Shares Non-controiling interest _ Non-controlling int=raam ! ‘Owned by as at the dato of as at the date of . NCI [E] acquisition consolidation (E]x[A+8] (1X Ic +0) > Case 1 [100 - 90} 10% 15,000 17,000 | Case 2 (100 - 85] 15% 19,500 18,000 Case 3 [100 - 80] 20% 14,000 16,000 Case 4 [100 - 100] Nil Ni Nil (2) Calculation of Goodwill or Gain on bargain purchase Consideration | Non- Net [ Gooawitt Gain on {cl controlting {Identifiable | 1ey+uj—-| bargain interest assets t! Purchase sw | wen) U-(6)- 40,000. | 15,000 5000 | 7 1,04,000: 19,500° 6,500 00 44,000 Nil N K gop00 | 0 | _ 90,000 10,000 - @ (9) Th balance in the Statement of Profit & Loss on the date of acquisition (1.04.2036) ml Capital Profit, as such the balance of Consolidated Profit & Loss Account shal to Holding Co.'s Profi. On 31.03.20X2 in each case the following amount shall be added or deducted balance of holding Co.'s Retained earnings, | % Share | Retained Retained Retained ‘Amount to Be Holding earnings as | earnings as on earnings post- | added/(deductes) i om on consolidation | acquisition 31.03.20x1 | “Date tM] | In]=[M]—[L] | Retained earningall . wu [0] = [K] xN Sy 1 90% 50,000 70,000 20,000 18,000 2 85% | 30,000 20,000 (10,000) (8,500) 3 0% 20,000 30,000 | — 10,000 4 100% 40,000 | 85,000 15,000 _| steakintinkeChap. 14 * Consolidated Financial Statements ind AS 27, 28, 103, 110, 111, 112 885 Question 9 P bought S on the 1 July 20X1. S retained earings at 31 December 20X1 are 715,000 and S profit for the year was 8,000. Immediately after acquisition, P gave S a loan of 240,000 which Carried interest of 10%, What were S retained eamings at acquisition? (Dip. IFRS — UK) ‘Answer: Normally, to find S retained earnings at acquisition, S profit could be time apportioned to find the post acquisition profit. If the intra-group loan didn't exist, then S post acquisition profit would be 74,000 (6/12 x 8,000). This would make retained eamings at acquisition 711,000 (@15,000 at year end less post acquisition profits of 74,000), However, the intra-group loan skews the results of S. While S has made a profit of 8,000, there is a %2,000 finance cost (%40,000 x 10% x 6/12) in the post acquisition period which’ would not have existed in the first six months. Therefore the underlying profit without that interest is 710,000, 75,000 must have been made in each 6 month period, with the additional 22,000 interest in the post acquisition period taking the post acquisition profit down to £3,000. Therefore retained earings at acquisition will be 712,000 000 les %3,000 post acquisition) and the post acquisition profits to go to consolidated retained earnings aré €3,000. x em Question 10 D acquired 80% of the ordinary share capital of C on 31 December 20X6 for 278,000. At this date the net assetsiofC were 785,000 What goddwill aftses on the:acquisition. (i)_ if the NCI is valuéd using the proportion of net assets method (ii) if the NCiig valued using the fair value method and the fair value of the NCI on the acquisition dates 0 (Dip. IFRS ~ UK) Answer: z () Parent holding (investment) at fair value 78,000 NCI value at acquisition (20% x %85,000) 47,000 95,000 Less: Fair value of net assets at acquisition Goodwill on acquisition (i) Parent holding (investment) at fair value 78,000 NCI value at acquisition 19,000 97,000 Less: (85,000) Fair value of net assets at acquisition Goodwill on acquisition 12,000 * kok886 Chap. 14 Consolidated Financial Statements Ind AS 27, 28, 103, 110, 4 Question 11 J Ltd acquires 24 million 71 shares (80%) of the ordinary shares of B Ltd by offering a st share exchange of two shares for every three shares acquired in B Ltd and a cash payment at per share payable three years later. J Ltd shares have a nominal value of 21 and a current m value of %2. The cost of capital is 10% and €1 receivable in 3 years can be taken as 70.75 (Calculate the cost of investment and show the journals to record it in J Ltd accous (ii) Show how the discount would be unwound. (Dip. IFRS Answer: (i) Cost of investment Deferred cash (at present value) 20.75 x (¥1 x 24m) Shares exchange (24m x 2/3) x 82 50m is the cost of investment for the purposes of the calculation of goodwill Journals in J Ltd individual accounts: Dr Cost of investment in subsidiah Non-current liabilities “ deferred consideration Share capital (16 million shates issued x €1-Aominal value) ‘Share premium (16 million shares issued x %1 premium element) Unwinding the discount 18m x 10% = T.8m Finarice coe Cr’ Nonicurrent liabilities - deferred consideration For the next three years the discount will be unwound, taking the interest to finance =m Until the full £24 million payment is made in Year 3. a Mina, Question 12 Sompany A acquired 90% equity interest in Company B on April 1, 2010 for a cons 85 crores in a distress sale. Company B did not have any instrument recognised in e Company appointed a registered valuer with whose assistance, the Company val value of NCI and the fair value identifiable net assels at % 15 crores and respectively. Required Find the value at which NCI has to be shown in the financial statements Answer In this case, Company A has the option to measure NCI as follows: * Option 1: Measure NCI at fair value i.e., ® 15 crores as derived by the value!Chap. 14 » Consolidated Financial Statements Ind AS 27, 28, 103, 110, 111, 112 887 * Option 2: Measure NCI as proportion of fair value of identifiable net assets i.e., % 10 crores (100 crores x 10%) Aiton nes ks Question 13 Company A acquires 70 percent of Company $ on January 1, 20X1 for consideration transferred of @ 5 million. Company A intends to recognise the NCI at proportionate share of fair value of identifiable net assets. With the assistance of a suitably qualified valuation professional, A measures the identifiable net assets of B at 7 10 million. A performs a review and determines that the business combination did not include any transactions that should be accounted for separately from the business combination Required State whether the procedures followed by A and the resulting measu not. Also calculate the bargain purchase gain in the process. ments are appropriate or (Study Material) Answer The amount of B's identifiable net assets exceeds the fair v plus the fair value of the NCI in B, resulting in an initial indication of a gain on a bargain purchase. Accordingly, A reviews the procedures it used to identify and measure the identifiable net assets acquired, to measure the fair value of both.the NCI and the consideration transferred, and to identify transactions that were not part of the ue oF the ‘consideration transferred isiness combination Following that review, A concludes that the procedures followed and the resulting measurements were appropriate, @) 4,00,00,000 rere (60,00,000 000) Gain on bargain paralié eae ae) Question 14 On 4st January, 20X1, A Ltd. acquires 80 per cent of the equity interests of B Ltd. in exchange for cash of €15 crore. The former owners of B Ltd. were required to dispose off their investments in B Ltd. by a specified date, and accordingly they did not have sufficient time to find potential buyers. A qualified valuation professional hired by the management of A Ltd. measures the identifiable net assets acquired, in accordance with the requirements of Ind AS 103, at 20 crore and the fair value of the 20 per cent non-controlling interest in B Ltd. at 4.2 crore. How should A Ltd. recognise the above bargain purchase? (Study Materia Answer ‘The amount of B Ltd's identifiable net assets i.e., 220 crore exceeds the fair value of the consideration transferred plus the fair value of the non-controlling interest in B Ltd. Le. 719.2 crore. Therefore, A Ltd. should review the procedures it used to identify and measure the net assets acquired and the-fair value of non-controlling interest in B Lid. and the consideration transferred. After the review, A Ltd. decides that the procedures and resulting measures were888 Chap. 14 + Consolidated Financial State, appropriate. A Ltd. measures the gain the difference between the amount of crore and of purchase consideration ‘on-controlling interest, which is &19.2 ero consideration of 15 crore and fair value of Non-controling interest of &4.2 crore). Assuming there exists clear evidence of the Combination as a bargain purchase, calculated at 280 lakh, which date and accumulated the same It the acquirer chose to measure Proportionate share of ot recognised a Maul nag interest would be £4 crore (220 crore v0 20). The gain on the bargain purcha ‘would be €1 crore 20 crore - (715 crore + &4 crore) ek & Question 15 Gompany A and Company B are in power business. Company A holds 25% of oq uity pompany 8. On November 1, Company. A obtains control of Company B wher it further 65% of Company B's shares, ‘hereby resuling in a total holding of 90% ‘The had the following features: * Gonsideration: Company A transters cash of ¢ °,00:000 andiissues 1,0 Sp November 1. The market price of Comoe A's Shares on the date of issue share. The equity shares issued as per tie transaction will coniprise 5° acquisition equity capital of Company. Gontingent consideration: Company A agrees to-Bay additional consi ¥°7,00,000 if the- cumulative, profits of c mpany:B exceed F 70,00,000 over th Years.-At the acqui itis ng cd probable that the extra will be ‘paid, T He of 8 contingent consideration is determined ta te acduisition de ‘Transaction costs:-Com; sts of ® 1,00,000, Non-controlling interests is determined to be #7 at. the acquisition date based on m ny A elects to olling. interest at fair value for th Previously held non- i A has owne: shares in Company B years. At November 1, the investment is in Company A's consolidated statement of Financial position at 6,00,000, arcou vale, ne eauity method: the fair value is ® 20,0000, ihe fair value of Company B's net identiiable assets at November 1 is € 60,00,0% in accordance with ind AS 103, Required Determine the accounting under acquisition method for the business combination by Comp Answer St us evaluate each of the steps discussed in the above analysis: Identify the acquirer In this case, Company A has paid cash to pderation to shareholders of Company hates issued to Company B pursuant to the ‘2cquisition do not transfer control of ta wile shareholders of Company 8. Therchag Company A is the a: the acquirer.Chap. 14 « Consolidated Financial Statements ind AS 27, 28, 103, 110, 114, 112 889 Determine acquisition date As the control over the business of Company B is transferred to Company A on November 1, that da nsidered as the acquisition date. Determine the purchase consideration The purchase consideration in this case will comprise the following: Cash consideration ®.59,00,000 Equity shares issued (1,00,000 x 10 te., at fair value) % 410,00,000 ‘Contingent consideration (at fair value) %3,00,000 Fair value of previously held interest % 20,00,000 ‘As such, the total purchase consideration is € 92,00,000. ‘Acquisition cost incurred by and on behalf of the Company A for acquisition of Company B should be recognised in the Statement of profit and loss. As such, an amount of % 1,00,000 should be recognised in Statement of profit and loss. Determine fair value of identifiable assets and liabilities ‘The fair value of identifiable net assets is determined at % 60,00,000 Measure NCI ‘The management has decided to recognis: recognised at € 7,50,000. Re-measure previously held interests in cas@ business combination is achieved in stages In this case, the control has:beén acquired in stages i.e., betore acquisition to control, the Company A exercised significant infllence over Company 8: As such, the previously held interest should bestfeasured at fair value and the differefice between the fair value and the carrying amount as, athe actuisition dat ‘ecognised in Statement of Profit and Loss. As such. it of 114,001000 (i... 20, 00,000) will be recognised in Statement of profit the NCI at its fair valtie, AS such, the NCI will be bul. be 0000 Determination of goodwill or gain on bargain purchase Goodwill ¢hould be alculated as follows: ®) Total consideration ~_92,00,000 Recognised amount of any non-controlling interest 7,50,000 Less: fair value of Lila-Domestic’s net identifiable assets (60,00,000) | Goodwit! _ 39,50,000 ke ok ok Question 16 On ‘st April, 20X1, POR Ltd. acquired 30% of the voting ordinary shares of XYZ Ltd. for €8,000 crore. POR Ltd. accounts its investment in XYZ Ltd. using equity method as prescribed under Ind AS 28. At 31st March, 20X2, PQR Ltd. recognised its share of the net asset changes of XYZ Ltd. using equity accounting as follows: (in crore) Share of profit or loss 700} Share of exchange difference in OCI 100] ‘Share of revaluation reserve of PPI inocl 50890 Chap. 14 © Consolidated Financial Statements Ind AS 27, 28, 103, 110, 11 The carrying amount of the investment in the associate on 31st March, 20X2 was ther £8,850 crore (8,000 + 700 + 100 + 50), On 1st April, 20X2, POR Ltd. acquired the remaining 70% of XYZ Ltd. for cash 25,000 The following additional information is relevant at that date: (in cron} Fair value of the 30% interest already owned Fair value ofXYZ's identifiable net assets How should such business combination be accounted for? (Study Mate ph 42 of Ind AS 103 provides that in a business combination achieved in sta acquirer shall remeasure its previously held equity interest in the acquiree at its acquisitio fair value and recognise the resulting gain or loss, if any, in profit or loss or other comprehy income, as appropriate. In prior reporting periods, the acquirer may have recognized chan the value of its equity interest in the acquire in other comprehensive income. If so, t that was recognised in other comprehensive income shall be recognised on the same bi would be required if the acquirer had disposed directly of the previously held equity interes! Applying the above, POR Ltd. records the following entry in olidated financial stateme 1 Snell Deb) Cre Foreign cumericy translation reserve Dr. 100 PPE révaluatioti reserv Dr. 50 To Cash To.tnvestment in'associate -XYZ Ltd. To Retained earings (W.N.2) dn previously held interest in XYZ. recognised in Profit or loss| |r Working Notes: 1. Calculation of Goodwill ICash consideration |Adc: Fair value of previously held equity interest in XYZ Ltd Total consideration Less: Fair value of identifiable net assets acquired [Goodwill 2. The credit to retained earnings represents the reversal of the unrealized gain Other Comprehensive Income related to the revaluation of property, plant and accordance with Ind AS 16, this amount is not reclassified to profit or loss.Chap. 14 * Consolidated Financial Statements Ind AS 27, 28, 103, 110, 111, 112 oot 3.The gan on th previously held uty interest in XYZ Lid calotaad osfolon Fa Value of 0% reat XYZ at fap RE 2.000 NS jevacess nsec cE Bos 150) Piveciod gn proven recoeed in O61 $00 Ganon previounly held terest in XYZ i, recopisd in rt ros a 250 FOI = (oh MN) ke Question 17 On April 1, 20X1, Company A acq quired 5% of the equity share capital of Company B for 1,00,000. A accounts for its invest men in B at Fair Value through OCI (FVOCI) under Ind AS 109, Finan instruments: Recognition and Measurement. At March 31, 20X2, A carried its investment in B at air value and reported an unrealised gain of ® 5,000 in other comprehensive income, which was Presented as a separate component of equity. On April 1, 20X2, A obtains control of B by acquiring the remaining 95 percent of B. Required Comment on the treatment to be done b ven in the question (Study Material) Answer 1e acquisitioh date A Pog be recycled to/income ‘statement ould be at fair value and therefore ombination. The fair value of the onsideration for the @5:per £:5,000'in OCI as the gain or loss is not allowed Fequirement of Ind AS 109. A's investment in B equire remeasurement as a result of the business Percent investment (1,05,000) plus the fair value of the jewly acquired interest is included in the acquisition accounting, ke kk Part 2: Treatment Question 18 Z Ltd. purchased 80% shares of ABC Lid. on ABC Lid., on 1st April, 20X1 % 60,000. 1st April, 20X1 for Z 1,40,000. The issued capital was € 1,00,000 and the balance in the statement of Profit & Loss /ear ending on 31st March, 20X2 ABC Ltd, has earned a profit of ¥ 20,000 ame time, declared and paid a dividend of 2 30,000 ume, the fair value of Non-controlling interest is Purchased interest. All net assets are identifiable net assets, there are no non-identifiable sets. The fair value of identifiable net assets is € 1,50,000 w by an entry how the dividend should be recorded in the books of XYZ Ltd. Rat is the amount of non-controlling interest as on 1st April, 20X1 and 3ist \ Value method. Also pass a Journal entry on the acquisition Date. and at the same as the fair value on a per-share basis of farch, 20X2 using (Str “taterial