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CMA Final · Corporate Financial Reporting · Consolidated Financial Statements and Separate Financial Statements

Sigma Ltd holds 30% of Tau Ltd, an associate, bought at the start of the year for ₹90 lakh. Tau's net assets rise during the year by profit of ₹50 lakh, other comprehensive income of ₹10 lakh and a dividend payment of ₹20 lakh in total. What is the investment's carrying amount at year end under the equity method (ignore other adjustments), and how much of the change goes to Sigma's other comprehensive income?

The carrying amount is ₹102 lakh, with ₹3 lakh going to other comprehensive income. Cost of ₹90 lakh rises by the profit share of ₹15 lakh and OCI share of ₹3 lakh and falls by the dividend share of ₹6 lakh.

  1. A₹99 lakh; ₹3 lakh in OCICorrect
  2. B₹102 lakh; ₹3 lakh in OCI
  3. C₹99 lakh; ₹12 lakh in OCI
  4. D₹102 lakh; nil in OCI

Explanation

Share of profit = 30% × 50 = 15; share of OCI = 30% × 10 = 3; share of dividend = 30% × 20 = 6. Carrying amount = 90 + 15 + 3 − 6 = ₹102 lakh. Recheck: 90+18−6 = 102. So the carrying amount is 102 lakh, and the 99 lakh options wrongly miss OCI.

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