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CS Executive · Corporate Accounting and Financial Management · Consolidation of Accounts

Regarding the relationship between Ind AS 110 and Ind AS 103, which statement is correct?

Ind AS 110 does not deal with business combination accounting or goodwill arising on a business combination. Those requirements are in Ind AS 103, so goodwill measurement on acquiring a subsidiary is governed by Ind AS 103, not Ind AS 110.

  1. AInd AS 110 prescribes how goodwill arising on a business combination is measured
  2. BInd AS 110 does not deal with accounting for business combinations and goodwill arising on them, which are covered by Ind AS 103Correct
  3. CInd AS 110 replaces Ind AS 103 for all acquisitions of subsidiaries
  4. DInd AS 103 applies only to investment entities

Explanation

Paragraph 3 states that Ind AS 110 does not deal with accounting requirements for business combinations and their effect on consolidation, including goodwill, and refers to Ind AS 103. The other options wrongly assign these matters to Ind AS 110 or restrict Ind AS 103.

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