Page 36 - 16. COMPILER QB - INDAS 103
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Note - only 1 amount for investment will be shown. All other assets and liabilities will be derecognised. We
        have lost control and therefore no consolidation.


        Q16. (April 19 – 20 Marks)

        The balance sheet of P Ltd. and D Ltd. as of 31st March, 20X2 is given below:
                         Assets                                                P Ltd.    D Ltd.

                         Non-Current Assets:
                         Property, plant and equipment                          300       500
                         Investment                                             400       100
                         Current assets:
                         Inventories                                            250       150
                         Financial assets
                         Trade receivables                                      450       300
                         Cash and cash equivalents                              200       100
                         Others                                                 400       230
                         Total                                                 2,000     1,380
                         Equity and Liabilities
                         Equity
                         Share capital- Equity shares of Rs. 100 each           500       400
                         Other Equity                                           810       225
                         Non-Current liabilities:
                         Long term borrowings                                   250       200
                         Long term provisions                                   50        70
                         Deferred tax                                           40        35
                         Current Liabilities:
                         Short term borrowings                                  100       150
                         Trade payables                                         250       300
                         Total                                                 2,000     1,380
        Other information

        (a) P Ltd. acquired 70% shares of D Ltd. on 1st April, 20X2 by issuing its own shares in the ratio of 1 share
            of P Ltd. for every 2 shares of D Ltd. The fair value of the shares of P Ltd. was Rs. 40 per share.
        (b) The fair value exercise resulted in the following: (all no. in Lakh)
            a.   Fair value of PPE on 1st April, 20X2 was Rs. 350 lakhs.
            b.  P Ltd. also agreed to pay an additional payment as consideration that is higher of 35 lakh and 25%
                of any excess profits in the first year, after acquisition, over its profits in the preceding 12 months

                made by D Ltd. This additional amount will be due after 2 years. D Ltd. has earned Rs. 10 lakh profit
                in the preceding year and expects to earn another Rs. 20 Lakh.
            c.   In addition to above, P Ltd. also had agreed to pay one of the founder shareholder a payment of Rs.
                20 lakh provided he stays with the Company for two year after the acquisition.

            d.  D Ltd. had certain equity settled share based payment award (original award) which got replaced by
                the new awards issued by P Ltd. As per the original term the vesting period was 4 years and as of
                the  acquisition  date  the  employees  of  D  Ltd.  have  already  served  2  years  of  service.  As  per  the


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