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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