Page 9 - 18. COMPILER QB - INDAS 28 _ 111

Carrying amount of investment in Consolidated Financial Statements of Bright Ltd. as on 31.3.20X2 as

per Ind AS 28
Rs.
Carrying amount as per separate financial statements 2,00,000

Less: Divided Received 15,000
Add: Proportionate share of profit of investee as per equity method 75,000

(30% x 3,00,000 x 10 / 12)
Carrying amount as on 31.3.20X2 2,60,000

Carrying amount of investment in Consolidated Financial Statement of Bright Ltd. as on 30.6.20X2 as
per Ind AS 28

Rs.
Carrying amount as on 31.3.20X2 2,60,000
Less: Dividend received (Rs. 60,000 x 30%) (18,000)

Carrying amount as on 30.6.20X2 2,42,000

Q7. (IND AS 103 & 28 – OCTOBER 2019)

Sumeru Limited holds 35% of total equity shares of Meru Limited, an associate company. The value of

Investments in Meru Limited on March 31, 20X1 is Rs. 3 crores in the consolidated financial statements of
Sumeru Limited.
Sumeru Limited sold goods worth Rs. 3,50,000 to Meru Limited. The cost of goods sold. is Rs. 3,00,000. Out of

these, goods costing Rs. 1,00,000 to Meru Limited were in the closing stock of Meru Limited.

During the year ended March 31, 20X2 the profit and loss statement of Meru Limited showed a loss of Rs. 1
crore.

A. What is the value of investment in Meru Limited as on March 31, 20X2 in the consolidated financial
statements of Sumeru Limited, if an equity method is adopted for valuing the investments in associates?

B. Would your answer be different if Meru Limited had earned a profit of Rs. 1.50 crores & declared
a dividend of Rs.75 lacs to the equity shareholders of the Company?

SOLUTION

(a) Value of investment in Meru Ltd. as on 31st March, 20X2 as per equity method in the consolidated

financial statements of Sumeru Ltd.
Rs.

Cost of Investment 3,00,00,000
Less: Share in Post-acquisition Loss (1,00,00,000 x 35%) (35,00,000)
Less: Unrealised gain on inventory left unsold with Meru Ltd.

[{(50,000/3,00,000) x 1,00,000} x 35%] (5,833)
Carrying value as per Equity method 2,64,94,167

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