Page 14 - 30. COMPILER QB - IND AS 101

MTPs QUESTIONS

Q8 (April 18)
X Ltd. has a subsidiary Y Ltd. on first time adoption of IND AS by Y Ltd., it availed the optional exemption

of the non-restating its past business combinations. However, X Ld. In its consolidated financial statement
has decided to restate all its past business combinations.
Whether the amounts recorded by subsidiary need to be adjusted while preparing the consolidated statement
of X Ltd. considering that X Ltd. dopes not avail the business combination exemption?
Will the answer be different if X Ltd. adopts Ind AS after Y Ltd.

Solution
As per para C1 od Appendix C of ind AS 101, a first-time adopter may elect not to apply the ind AS 103

retrospectively to past business combinations (business combinations that occurred before the date of
transition to Ind AS). However, it is a first time adopter restates any business combination to comply with
the Ind AS 103, it shall restate all later business combination and shall also apply Ind AS 110 from that same
date.
Based on the above, if X Ltd. restates past business combinations, it would have to be applied to all business
combinations of the group including those by subsidiary Y Ltd. for the proposer of Consolidated Financial

Statements.
Para D17 of the Appendix D of Ind as 101 states that if an entity becomes a first-time adopter later than its
subsidiary at the same carrying amounts as in financial statement of the subsidiary, after adjusting for
consolidation and equity accounting adjustments and for the effects of the business combination in which the

entity acquired the subsidiary. Thus, in case where the parent adopts Ind AS later than the subsidiary then it
does not change the amounts already recognised by the subsidiary.

Q9 (October 19 – 15 Marks)

H Ltd. has the following assets and liabilities as at March 31, 20X1, prepared in accordance with previous
GAAP:
Particulars Notes Amount (Rs.)

Property, Plant and Equipment 1 1,34,50,000
Investments in S. Ltd. 2 48,00,000
Debtors 2,00,000
Advances for purchase of inventory 50,00,000
Inventory 8,00,000
Cash 49,000
Total assets 2,42,99,000
Deferral loan 3 60,00,000
Creditors 30,00,000
Short term borrowing 8,00,000
Provisions 12,00,000
Total liabilities 1,10,00,000
Share capital 1,30,00,000

Reserves: 2,99,000
30. 13