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A bargain purchase gain is recognised in OCI and accumulated as capital reserve when clear evidence supports the bargain. If no such evidence exists, Ind AS 103 directs the gain to:
ARetained earnings
BEquity directly as capital reserve (skipping OCI)
CGoodwill (negative)
DProfit or loss
Answer & Solution
Correct answer: B. Equity directly as capital reserve (skipping OCI)
Paragraph 36A: with clear evidence → OCI then capital reserve. Without clear evidence → directly to equity as capital reserve (skipping OCI). Either way, P&L recognition (IFRS 3 treatment) is excluded under the Indian carve-out.
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