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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Aarav Ltd, Bhanu Ltd and Chetan Ltd are all subsidiaries of Promoter Holdings Ltd, the ultimate controlling party. Aarav Ltd acquires an interest in a joint operation shared with Bhanu Ltd and Chetan Ltd. The parties are under common control of the same ultimate controlling party both before and after the acquisition, and that control is not transitory. According to Ind AS 111 Appendix 1 comparison with IFRS 11, how does Ind AS differ?

Ind AS 111 directs the acquirer to Appendix C of Ind AS 103 on business combinations under common control when all sharing parties are under the same non-transitory common control before and after. IFRS 11 scopes this out because IFRS 3 does not cover common control combinations.

  1. AInd AS 111 refers to Appendix C of Ind AS 103 on business combinations under common control for this acquisition, whereas IFRS 11 does not deal with itCorrect
  2. BInd AS 111 and IFRS 11 are identical, both applying Ind AS 103 fair value acquisition accounting
  3. CInd AS 111 excludes such acquisitions from any accounting guidance
  4. DInd AS 111 requires the equity method for the interest

Explanation

Paragraph B33D of Ind AS 111 refers to the accounting in Appendix C Business Combinations under Common Control of Ind AS 103 for such acquisitions. IFRS 11 scopes this out because IFRS 3 does not deal with common control combinations. The equity method is for joint ventures, not the treatment here.

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