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X Ltd. acquired 80% of Excel Pvt. Ltd. some years ago and recognised goodwill under previous GAAP without doing a fair-value exercise. Under Ind AS 101 OPTIONAL EXEMPTION for past business combinations:
AX Ltd. must restate all past business combinations under Ind AS 103
BX Ltd. must derecognise all previous-GAAP goodwill on transition
CX Ltd. may ELECT NOT to restate past business combinations — but must apply Ind AS 110 NCI rules prospectively; if it RESTATES, then both Ind AS 103 and Ind AS 110 apply retrospectively from that election date
DX Ltd. can only restate combinations occurring within the last 3 years
Answer & Solution
Correct answer: C. X Ltd. may ELECT NOT to restate past business combinations — but must apply Ind AS 110 NCI rules prospectively; if it RESTATES, then both Ind AS 103 and Ind AS 110 apply retrospectively from that election date
Optional exemption (Appendix C) — entities can elect NOT to restate past business combinations. If elected, previous-GAAP goodwill is carried forward (tested for impairment under Ind AS 36) and intangibles/liabilities not previously recognised are NOT recognised at transition. If the entity restates, it must do so from a chosen date forward, and Ind AS 110 NCI rules also apply retrospectively from that date.
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