Page 41 - 16. COMPILER QB - INDAS 103

Non- controlling interest measured at proportionate
share of the acquiree‖s identifiable net assets (1,75,000 X 20%) 35
Less: fair value of net assets of subsidiary at date of acquisition (175)

Goodwill arising on consolidation 20
Impairment at 31-03-20x3 (8)
Goodwill at 31-03-20x4 12

Q18. (October 19 – 5 Marks)

Sumeru Limited holds 35% of total equity shares of Meru Limited, an associate company. The value of
Investments in Meru Limited on March 31, 20X1 is Rs. 3 crores in the consolidated financial statements of
Sumeru Limited.
Sumeru Limited sold goods worth Rs. 3,50,000 to Meru Limited. The cost of goods sold. is Rs. 3,00,000. Out of
these, goods costing Rs. 1,00,000 to Meru Limited were in the closing stock of Meru Limited.

During the year ended March 31, 20X2 the profit and loss statement of Meru Limited showed a loss of Rs. 1
crore.
A. What is the value of investment in Meru Limited as on March 31, 20X2 in the consolidated financial
statements of Sumeru Limited, if an equity method is adopted for valuing the investments in associates?

B. Would your answer be different if Meru Limited had earned a profit of Rs. 1.50 crores and declared a
dividend of Rs. 75 lacs to the equity shareholders of the Company?
SOLUTION

Case A:
Particulars Amount
Investments 3,00,00,000
Less: Share in Loss (35,00,000)
Less: Investor‖s Share in unrealised Profit (5,000)
(14286x35%)
2,64,95,000

Case 2:
Particulars Amount
Investments 3,00,00,000
Add: Post acq. Share in Profit (52,50,000)
Less: Dividend Received (26,25,000)
Less: Investor‖s Share in unrealised Profit (5,000)
(14286x35%)
3,26,20,000

16. 40