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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Lakshmi Power Ltd, Mehta Steel Ltd and Nair Cement Ltd are all controlled by the same ultimate parent, Omega Group, both before and after Lakshmi Power acquires an interest in a joint operation they share. The common control is not transitory. Which accounting does Ind AS 111 refer to for this acquisition?

Ind AS 111 refers to Appendix C 'Business Combinations under Common Control' of Ind AS 103 for acquiring an interest in a joint operation when all joint controlling parties are under the same ultimate control before and after, and that control is not transitory.

  1. AInd AS 103 acquisition method, with goodwill measured at fair value
  2. BAppendix C 'Business Combinations under Common Control' of Ind AS 103Correct
  3. CInd AS 28 equity method
  4. DInd AS 109 fair value through profit or loss

Explanation

Ind AS 111 (paragraph B33D) refers to the accounting in Appendix C of Ind AS 103 when the parties sharing joint control, including the acquirer, are under common control of the same ultimate controlling party both before and after, and control is not transitory. The standard acquisition method is wrong because that is not the referred treatment for common control.

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