Page 5 - 16. COMPILER QB - INDAS 103

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Smart Technologies started preparing its financial statements based on Ind AS from 1 April, 2015 on a

voluntary basis. The Micro Fly India Pvt. Ltd. is planning to merge the business of Cloud Industries India
Pvt. Ltd. with its own for which it presented before the members in the meeting the below extract of
latest audited Balance Sheet of Cloud Industries (prepared on the basis of Ind AS) for the year ended
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31 March, 2017:
Balance Sheet as at March 31,2017 (Rs. in Crores)

Assets
Non-current assets
Property, plant and Equipment 15.00
15.00
Current Assets
(a) Financial assets
Trade Receivables 10.00
Cash and cash equivalents 10.00
Other current assets 8.00
28.00
Total 43.00

Equity and Liabilities
Equity
Equity Share Capital 45.00
Other Equity:
-Reserves & Surplus (Accumulated Losses)* (24.80)
20.20
Liabilities
Non-current Liabilities
Financial liabilities
-Borrowings 2.80
Current Liabilities 20.00
22.80
Total 43.00
*The Tax Loss carried forward of the company is Rs. 27.20 crores.
On September 5, 2017, the merger got approved by the Directors. The purchase consideration payable by Micro
Fly to Cloud Industries was fixed at Rs. 18.00 crores payable in cash and that MicroFly took over all the assets
and liabilities of Cloud Industries.

Present the statement showing the calculation of assets/liabilities taken over as per Ind AS. Also mention the
accounting of differences between consideration and assets/liabilities taken over.
SOLUTION

1. Before the merger, Cloud Industries and Micro Fly were the subsidiaries of Smart Technologies Inc. As he
control is not transitory, the proposed merger will fall under the category of Business combination of
entities under common control and it will be accounted as per Pooling of Interest Method under Ind AS
103.

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