Page 84 - 16. COMPILER QB - INDAS 103

Balance Sheet of SUNMOON Ltd. as on 1.1.20X2 Rs in '000
ASSETS Note No. Amount

Non-current assets
Property, Plant and Equipment 32,000
Financial assets
Investments 3,200
Current assets
Inventory 8,000
Trade receivable 11,600
Cash and Cash equivalent 1,700
EQUITY AND LIABILITIES
Equity
Equity share capital (of face value of Rs 10 each) 1 26,000
Other equity 2 11,500
Liabilities
Non-current liabilities
Financial liabilities
Borrowings 3 14,000
Current liabilities
Trade payable 5,000
56,500

Notes to Accounts
(R in ‘000) (R in ‘000)
1 Share Capital
26,00,000 Equity Shares of Rs 10 each 260,00
2 Other Equity
General Reserve (30,00 + 40,00) 70,00
Profit & Loss (20,00 + 10,00) 30,00
Investment Allowance Reserve (10,00 + 2,00) 12,00
Export Profit Reserve (50 + 1,00) 300 11,500
3 Long Term Borrowings

12% Debentures 14,000

(b) Assuming MOON Ltd is a larger entity and their management will take the control of the entity
SUNMOON Ltd.
In this case MOON Ltd. and SUN Ltd. are not under common control and hence accounting prescribed under
Ind AS 103 for business combination will be applied. A question arises here is who is the accounting acquirer
SUNMOON Ltd which is issuing the shares or SUN Ltd. or MOON Ltd. As per the accounting guidance provided

in Ind AS 103, sometimes the legal acquirer may not be the accounting acquirer. In the given scenario
although SUNMOON Ltd. is issuing the shares but MOON Ltd. post-merger will have control and is bigger in
size which is a clear indicator that MOON Ltd. will be an accounting acquirer. This can be justified by the
following table

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