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Closing balance of Retained Earnings 300.00
Less: Pre-acquisition balance (125.00)

Post-acquisition gain 175.00
Less: Additional Depreciation on PPE [(200/5) x 2]
(80.00)
Share in post-acquisition gain 95.00 19.00 76.00
Less: Impairment on goodwill 258.00 (51.60) (206.40)

347.40 (130.40)

6. Consolidated Retained Earnings as on 31st March 2019
Rs. in 000s

A Ltd. 1,400.00
Add: Share of post-acquisition loss of S Ltd. (W.N.5) (130.40)
Less: Finance cost on deferred consideration (37.5 + 41.25) (78.75)
(W.N.7)
Retained Earnings as on 31st March 2019 1,190.85

7. Calculation of value of deferred consideration as on 31st March 2019
Rs. in 000s
Value of deferred consideration as on 1st April 2017 (W.N.1) 375.00

Add: Finance cost for the year 2017-2018 (375 x 10%) 37.50
412.50
Add: Finance cost for the year 2018-2019 (412.50 x 10%) 41.25

Deferred consideration as on 31st March 2019 453.75

8. Calculation of current Liability as on 31st March 2019
Rs. in 000s

A Ltd. 1,250.00
S Ltd. 650.00
Deferred consideration as on 31st March 2019 (W.N.7) 453.75
Current Liability as on 31st March 2019 2,353.75

Q32. (Jan. 21) (Similar to Q18)

On 1st April 2019, Big Limited acquired a 35 interest in Dig Limited and achieved a significant influence. The
cost of the investment was Rs. 3,00,000. Dig Limited has net assets of Rs. 5,50,000 as on 1st April 2019. The
fair value of those net assets is Rs. 6,50,000, since the fair value of property, plant and equipment is Rs.

1,00,000 higher than its book value. This property, plant and equipment have a remaining useful life of 8
years. For the financial year 2019-2020, Dig Limited earned a profit (after tax) of Rs. 1,00,000 and paid a
dividend of Rs. 11,000 out of these profits. Dig Ltd. has also recognized the loss of Rs. 15,000, that arose from
re-measurement of defined benefit directly in 'Other Comprehensive Income'. Calculate Big Ltd.'s interest in
Dig Ltd. as at the year ended 31 st March 2020 under the relevant method.

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