Page 17 - 16. COMPILER QB - INDAS 103

To NCI (23 x 30%) Rs.6.9 million
Thus, goodwill on the reporting date in the books of Monsoon Limited would be = 1.4 million EURO x Rs. 84 =
Rs. 117.6 million.

Q10. (Nov. 21) (Also added in New ICAI Module)

Company X is engaged in the business of exploration & development of Oil & Gas Blocks.
Company X currently holds participating interest (PI) in below mentioned producing Block as follows:
Block Name Company X Company Y Company Z Total
AWM/01 30% 60% 10% 100%
For the above Block, Company X, Y & Z has entered into unincorporated Joint Venture.

Company Y is the Operator of the Block AWM/01. Company X & Company Z are the Joint Operators. Company
Y incurs all the expenditure on behalf of Joint Venture and raises a cash call to Company X & Company Z at
each month end in respect of their share of expenditure incurred in Joint Venture. All the manpower and
requisite facilities / machineries owned by the Joint venture and thereby owned by all the Joint Operators.
For the past few months, due to liquidity issues, Company Z defaulted in payment of cash calls to operators.

Therefore, company Y (Operator) has issued notice to company Z for withdrawal of their participating right
from 01.04.20X1. However, company Z has filed the appeal with the arbitrator on 30.04.20X1.
Financial performance of company Z has not improved in subsequent months and therefore company Z has
decided to withdraw participating interest rights from Block AWM/01 and entered into a sale agreement with
Company X & Company Y. As per the terms of the agreement, dated 31.5.20X1, Company X will receive

33.33% share & Company Y will receive 66.67% share of PI rights owned by Company Z.
Company X is required to pay Rs.1 Lacs against 33.33% share of PI rights owned by Company Z.
After signing the sale agreement, Operator (company Y) approached the government of India for modification
in PSC (Production Sharing Contract) i.e. removal of Company Z from PSC of AWM/01 and the government
has approved this transaction on 30.6.20X1. Government approval for the modification in PSC is essential given
the industry in which the joint-operators operate

Balance sheet of Company X & Company Z are as follows:
Particulars Company X Company Z
31.5.20X1 30.6.20X1 31.5.20X1 30.6.20X1
Rs. Rs. Rs. Rs.

Assets
Non-Current Assets
Property, Plant & Equipment 5,00,000 10,00,000 1,50,000 3,00,000
Right of Use Asset 1,00,000 2,00,000 10,000 20,000
Development CWIP 50,000 1,00,000 50,000 1,00,000
Financial Assets
Loan receivable 25,000 50,000 25,000 50,000
Total Non-Current Assets 6,75,000 13,50,000 2,35,000 4,70,000
Current assets
Inventories 1,00,000 2,00,000 15,000 30,000
Financial Assets
Trade receivables 1,50,000 3,00,000 50,000 1,00,000
16. 16