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In a business combination achieved in stages, the acquirer's previously held equity interest in the acquiree is:
ARemeasured to acquisition-date fair value with gain/loss recognised in P&L (or OCI if the previous classification routed gains/losses there)
BRemeasured to fair value but the gain/loss is recognised directly in retained earnings
CCarried forward at the carrying amount with no remeasurement
DWritten off entirely on acquisition date
Answer & Solution
Correct answer: A. Remeasured to acquisition-date fair value with gain/loss recognised in P&L (or OCI if the previous classification routed gains/losses there)
Ind AS 103 paragraph 42 requires remeasurement of the previously held interest to acquisition-date fair value, with the resulting gain/loss going to P&L (or OCI if the prior classification — e.g. FVOCI under Ind AS 109/27 — routed remeasurements through OCI).
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