CA Final · Financial Reporting · Ind AS 111 Joint Arrangements
Vindhya Cement Ltd and Godavari Steel Ltd, both controlled by the same promoter group before and after the transaction, with control not transitory, are parties sharing joint control of a joint operation that is a business. Vindhya acquires an additional interest in it. Per the differences between Ind AS 111 and IFRS 11 described in the Standard, which statement is correct?
Ind AS 111 refers to Appendix C of Ind AS 103, Business Combinations under Common Control, for acquiring an interest in a joint operation when the parties are under the same ultimate control before and after, non-transitorily. IFRS 11 scopes this out because IFRS 3 does not cover common control.
- AInd AS 111 refers to Appendix C of Ind AS 103 on business combinations under common control for this acquisition, whereas IFRS 11 scopes it out as IFRS 3 does not deal with common control combinationsCorrect
- BInd AS 111 and IFRS 11 both require the acquisition to be accounted at fair value under Ind AS 103 main body
- CInd AS 111 excludes such acquisitions from its scope entirely, as does IFRS 11
- DInd AS 111 requires such an acquisition to be accounted for under Ind AS 28
Explanation
Appendix 1 of Ind AS 111 notes that the paragraph on acquisition of an interest in a joint operation refers to the accounting in Appendix C of Ind AS 103 when the sharing parties are under common control both before and after, and that control is not transitory. IFRS 11 scopes this out because IFRS 3 does not deal with common control. The fair value and equity method options are incorrect.
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