Skip to content

CMA Final · Corporate Financial Reporting · Business Combination under Common Control

Under Appendix C of Ind AS 103, which method must be used to account for business combinations involving entities or businesses under common control?

The pooling of interests method must be used. Appendix C of Ind AS 103 says business combinations involving entities or businesses under common control shall be accounted for by pooling of interests, rather than the acquisition method with fair value measurement used for other combinations.

  1. AAcquisition method, with identifiable net assets at fair value
  2. BPooling of interests methodCorrect
  3. CEquity method
  4. DFair value through other comprehensive income method

Explanation

Appendix C paragraph 8 says business combinations involving entities or businesses under common control shall be accounted for using the pooling of interests method. The acquisition method applies to other business combinations in which an acquirer obtains control. The equity method and the fair value through OCI approach are not prescribed for these combinations.

Did you get it right without looking?

One question tells you little. A timed set on Business Combination under Common Control shows your real accuracy, how long you take and where you lose marks.

Practise Business Combination under Common ControlFree diagnostic mock

More Business Combination under Common Control questions