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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Gamma Ltd and Hari Ltd are under the common control of the same ultimate parent, Ishwar Holdings Ltd, both before and after Gamma Ltd acquires an interest in a joint operation in which Hari Ltd also shares joint control. The common control is not transitory. The joint operation constitutes a business. How does Ind AS 111 differ from IFRS 11 for this acquisition?

Ind AS 111 directs the acquirer to the accounting in Appendix C of Ind AS 103 for business combinations under common control, where the common control is not transitory. IFRS 11 scopes this out because IFRS 3 does not cover common control, which is the difference.

  1. AInd AS 111 applies the Appendix C of Ind AS 103 accounting for business combinations under common control, whereas IFRS 11 scopes this outCorrect
  2. BInd AS 111 requires acquisition-method fair value accounting while IFRS 11 requires pooling
  3. CInd AS 111 and IFRS 11 are identical on this, both applying Appendix C of Ind AS 103
  4. DInd AS 111 excludes such acquisitions from any accounting guidance

Explanation

The Ind AS 111 comparison with IFRS 11 notes that paragraph B33D refers to Appendix C of Ind AS 103 for acquiring an interest in a joint operation when parties sharing joint control are under common control of the same ultimate controlling party before and after, and control is not transitory. IFRS 11 scopes this out because IFRS 3 does not deal with common control combinations.

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