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Company X (the ultimate parent) reorganises so that Company Z (its retail subsidiary) acquires Company X's shares in Company Y (another subsidiary) in exchange for Z's own shares. Is this a common control combination?
ANo — internal transfers are outside Ind AS 103 entirely
BNo — Z is now the legal owner of Y; common control is broken
CYes — but only because both Y and Z are private companies
DYes — before AND after the reorganisation, Y and Z are ultimately controlled by X; the transaction is a common control combination within Appendix C of Ind AS 103
Answer & Solution
Correct answer: D. Yes — before AND after the reorganisation, Y and Z are ultimately controlled by X; the transaction is a common control combination within Appendix C of Ind AS 103
The ultimate parent X continues to control both Y and Z. Direct ownership has shuffled, but ultimate control hasn't changed — definition of common control combination is met. (Ind AS 103 illustration 30.)
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