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CA Final · Financial Reporting · Ind AS 12 Income Taxes

Gamma Realty Ltd acquired a business under Ind AS 103 and recognised a bargain purchase gain. The accountant is reviewing why paragraph 68(a) of Ind AS 12 differs from the IAS 12 version. Which statement is correct?

Paragraph 68(a) of Ind AS 12 was modified because Ind AS 103 treats bargain purchase gain differently from IFRS 3. It was not deleted, and the Ind AS 40 fair value model reason relates to other paragraphs.

  1. AParagraph 68(a) was modified because Ind AS 103 accounts for bargain purchase gain differently from IFRS 3Correct
  2. BParagraph 68(a) was deleted to maintain paragraph numbering with IAS 12
  3. CParagraph 68(a) was modified because Ind AS 40 forbids the fair value model
  4. DParagraph 68(a) was substituted by Notification dated 30th March, 2019 as a deleted paragraph

Explanation

The comparison states that paragraph 68(a) was modified as a consequence of the different accounting treatment of bargain purchase gain in Ind AS 103 compared with IFRS 3. The Ind AS 40 reason applies to paragraphs 20 and 51E, so that option is wrong.

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