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(b) its liabilities, including its share of any liabilities incurred jointly;

(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output by the joint operation; and

(e) Its expenses, including its share of any expenses incurred jointly.”
The rights and obligations, as specified in the contractual arrangement, which an entity has with respect to

the assets, liabilities, revenue and expenses relating to a joint operation might differ from its ownership
interest in the joint operation. Thus a joint operator needs to recognise its interest in the assets, liabilities,

revenue and expenses of the joint operation on the basis as specified in the contractual arrangement, rather
than in proportion of its ownership interest in the joint operation.

Thus, AB Limited would record the following in its financial statements, to account for its rights to the assets

of PQR and its obligations for the liabilities of PQR.
Rs. in crore
Assets
Cash (40 x 50%) 20

Building 1* 240
Building 2 (200 x 50%) 100
Liabilities
Debt owned to XYZ (third party)** 240
Employees benefit plan obligation (100 x 50%) 50
* Since AB Limited has the rights to all of Building No. 1, it records the amount in its entirety.
** AB Limited has an obligation for the debt owed by PQR to XYZ in its entirety.

Q4. (Nov. 20 – IND AS 28)

st
On 1 April 2019, Investor Ltd. acquired 35% interest in another entity, XYZ Ltd. Investor Ltd. determines

that it is able to exercise significant influence over XYZ Ltd. Investor Ltd. has paid total consideration of Rs.
47,50,000 for acquisition of its interest in XYZ Ltd. At the date of acquisition, the book value of XYZ Ltd.’s

net assets was Rs. 90,00,000 and their fair value was Rs. 1,10,00,000. Investor Ltd. has determined that the
difference of Rs. 20,00,000 pertains to an item of property, plant and equipment (PPE) which has remaining

useful life of 10 years.
st
During the year, XYZ Ltd. made a profit of Rs. 8,00,000. XYZ Ltd. paid a dividend of Rs. 12,00,000 on 31

March, 2020. XYZ Ltd. also holds a long-term investment in equity securities. Under Ind AS, investment is

classified as at FVTOCI in accordance with Ind AS 109 and XYZ Ltd. recognized an increase in value of
investment by Rs. 2,00,000 in OCI during the year. Ignore deferred tax implications, if any.

st
Calculate the closing balance of Investor Ltd.’s investment in XYZ Ltd. as at 31 March, 2020 as per the

relevant Ind AS.

18. 5