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CA Final · Financial Reporting · Ind AS 12 Income Taxes

Kaveri Industries Ltd acquired a business under Ind AS 103 and recognised a bargain purchase gain. Paragraph 68(a) of Ind AS 12 differs from IAS 12 here. What is the reason for this difference?

Paragraph 68(a) of Ind AS 12 was modified because Ind AS 103 accounts for a bargain purchase gain differently from IFRS 3. The change is a consequential amendment tied to that treatment, not a removal of deferred tax or of goodwill.

  1. AInd AS 103 treats bargain purchase gain differently from IFRS 3, so paragraph 68(a) was modifiedCorrect
  2. BInd AS 12 does not apply to business combinations
  3. CGoodwill is not recognised under Ind AS, so paragraph 68(a) was modified
  4. DInd AS has removed deferred tax on acquired assets

Explanation

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 other options give reasons not stated in the standard's comparison.

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