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

Under Appendix C of Ind AS 103, which of the following transactions is stated to fall within common control business combinations?

Transfer of subsidiaries or businesses between entities within a group is stated to be a common control business combination. Such transactions are accounted for using the pooling of interests method. Unrelated acquisitions, true mergers of unrelated entities and single asset purchases are not common control combinations.

  1. AAcquisition of an unrelated company by a listed company through a cash purchase
  2. BTransfer of subsidiaries or businesses between entities within a groupCorrect
  3. CA true merger between two unrelated companies of equal size
  4. DPurchase of a single machine from a group company

Explanation

Appendix C states that common control business combinations include transactions such as transfer of subsidiaries or businesses between entities within a group. An acquisition of an unrelated company and a true merger of unrelated entities are not under common control. A machine is an asset, not a business.

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