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CA Final · Financial Reporting · Ind AS 1 Presentation of Financial Statements

Ananya Infra Ltd acquired a business and recognised a bargain purchase gain under Ind AS 103. The CFO asks where this gain must be reflected in the disclosures required by Ind AS 1 for the reconciliation of each component of equity. Which statement best reflects Ind AS 1 as notified in India, compared with IAS 1?

Ind AS 1 amends paragraph 106(d)(iv) so the reconciliation of each component of equity includes the recognition of a bargain purchase gain arising on a business combination. This matches the treatment prescribed in Ind AS 103 and differs from IAS 1.

  1. ANo Ind AS 1 change; the gain is shown only in the Ind AS 103 notes
  2. BParagraph 106(d)(iv) of Ind AS 1 is amended to include disclosure of recognition of the bargain purchase gain arising on a business combination, in line with Ind AS 103Correct
  3. CThe bargain purchase gain must be shown only as other comprehensive income, per paragraph 10A
  4. DInd AS 1 requires the gain to be removed from the equity reconciliation altogether

Explanation

Paragraph 106(d)(iv) of Ind AS 1, on the reconciliation between opening and closing carrying amounts for each component of equity, is amended to include recognition of the bargain purchase gain on a business combination, consistent with Ind AS 103. The claim of no Ind AS 1 change is wrong, and paragraph 10A concerns statement presentation, not this gain.

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