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Entity X acquires 100% of Entity Y on 1 April 20X1. PPA gives provisional net assets ₹100 mn against consideration ₹150 mn. Y had carry-forward losses with no DTA on the acquisition date (lack of convincing evidence). On 31 March 20X2 Y wins a major contract enabling utilisation of the losses, so a DTA is now recognised. Can this DTA be adjusted against goodwill recognised at acquisition?
AYes — DTA represents a fact that existed at acquisition; goodwill is reduced
BNo — the new contract is a new fact/change of estimate after acquisition; DTA goes through P&L per Ind AS 12; goodwill is NOT adjusted
CNo — DTAs can never be recognised after acquisition
DYes — but only within 90 days of acquisition
Answer & Solution
Correct answer: B. No — the new contract is a new fact/change of estimate after acquisition; DTA goes through P&L per Ind AS 12; goodwill is NOT adjusted
Measurement-period adjustments are reserved for new INFORMATION about facts and circumstances that EXISTED on the acquisition date. The DTA here arises from a new event (contract win) after acquisition — a change of estimate accounted under Ind AS 12, not via goodwill.
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