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CA Final · Financial Reporting · Ind AS 1 Presentation of Financial Statements

Rudra Infra Ltd acquired a business in a combination where the fair value of net identifiable assets exceeded consideration, resulting in a gain on a bargain purchase. The controller asks how Ind AS 1 differs from IAS 1 in the reconciliation of equity components. Which statement is correct?

Ind AS 1 amends paragraph 106(d)(iv) so the reconciliation of each equity component also discloses recognition of a bargain purchase gain arising on a business combination, consistent with Ind AS 103. The reconciliation requirement remains; the amendment only adds this disclosure.

  1. AInd AS 1 removes the requirement to reconcile each component of equity at the beginning and end of the period
  2. BInd AS 1 paragraph 106(d)(iv) is amended to include disclosure of recognition of bargain purchase gain arising on business combination, in line with Ind AS 103Correct
  3. CInd AS 1 requires the bargain purchase gain to be shown as other comprehensive income in the equity reconciliation
  4. DInd AS 1 paragraph 106(d)(iv) is amended only to require disclosure of share-based payment reserves

Explanation

Appendix 1 states that paragraph 106(d)(iv), on reconciling the carrying amount of each component of equity, was amended to include disclosure of recognition of bargain purchase gain on a business combination, aligned with the Ind AS 103 treatment. The reconciliation is not removed, and the text does not say the gain is OCI or that the amendment concerns share-based payments.

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