Page 60 - 16. COMPILER QB - INDAS 103

(iii) Impact of fair value adjustments 0 (50,000) (50,000)
Adjusted retained earnings consolidated 7,44,000 6,70,000 14,14,000

Note: The above solution has been drawn by making following assumptions, at required places:

(i) Hold Ltd. measures the investment in Sub Ltd. at cost (less impairment, if any) in its separate financial
statements as permitted in Ind AS 27, Separate Financial Statements.
(ii) Increase in land and buildings represents only land element.
(iii) Depreciation on plant and machinery is on WDV method.
(iv) Fair value adjusted trade payables continue to exist on 31.3.2018.
(v) Inventories are valued at cost, being lower than NRV and that application of cost formula for the

purposes of consolidated financial statements results in entire fair value adjustment to be included in
the carrying amount of inventories of Sub Ltd. on 31.3.2018.

Q24. (May 18 – 10 Marks) (Similar to Q22)
Notorola Limited has two divisions A and B. Division A has been making constant profits while Division B has
been invariably suffering losses.
On 31st March 2018, the division-wise draft extract of the Balance Sheet was as follows:

(Rs in crore)
A B Total
Fixed Assets Cost 500 1000 1500
Depreciation (450) (800) (1250)
Net Fixed Assets (A) 50 200 250
Current Assets 400 1000 1400
Less: Current Liabilities (50) (800) (850)
Net Current Assets (B) 350 200 550
Total (A) + (B) 400 400 800
Financed by :
Loan Funds - 600 600

Capital : Equity Rs 10 each 50 - 50
Surplus 350 (200) 150
Total 400 400 800
Division B along with its assets and liabilities was sold for Rs 50 crore to Senovo Limited a new company,
who allotted 2 crore equity shares of Rs 10 each at a premium of Rs 15 per share to the members of Notorola
Limited in full settlement of the consideration, in proportion to their shareholding in the company. One of the
members of the Notorola Limited was holding 52% shares of the company.
Assuming that, there are no other transactions, you are required to:

(i) Pass journal entries in the books of Notorola Limited.
(ii) Prepare the Balance Sheet of Notorola Limited after the entries in (i).
(iii) Prepare the Balance Sheet of Senovo Limited.
Balance Sheet prepared for (ii) and (iii) above should comply with the relevant Ind AS and Schedule III of
the Companies Act, 2013. Provide Notes to Accounts, for 'Other Equity' in case of (ii) and 'Share Capital' in

case of (iii), only.

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