Home › CA Final › financialreporting › Ind AS 103 — Reverse Acquisition Mechanics, Replacement Awards, Contingent vs Deferred Consideration & NCI Methods › An acquirer issues a replacement share-based awa…
An acquirer issues a replacement share-based award. Acquiree's original award: 4-year vesting, 2 years already served, FV ₹5 lakh. Replacement award: 1-year remaining vesting, FV ₹8 lakh. The portion in PURCHASE CONSIDERATION is:
A₹5 lakh × 2/4 = ₹2.5 lakh
B₹8 lakh × 2/4 = ₹4 lakh
C₹8 lakh (entire replacement FV)
D₹5 lakh (original award FV)
Answer & Solution
Correct answer: A. ₹5 lakh × 2/4 = ₹2.5 lakh
Per Ind AS 103 B59: portion in PC = market-based measure of acquiree award (₹5 lakh) × portion of vesting period completed (2) / greater of total vesting period (3) or original vesting period (4) = 5 × 2/4 = ₹2.5 lakh. Remaining 8 − 2.5 = ₹5.5 lakh is post-combination expense over 1 year.
Related questions
HUL recognised Indemnification Asset of ₹608 cr against contingent tax liabilities of GSK HUL also acquired Horlicks IPR for ₹3,045 cr separately, plus ₹91 cr transaction cost. TheHUL's GSK CH disclosures show TRANSACTION COST split as: ₹44 cr (related to issuance of shHindustan Unilever's merger of GSK CH (1 Apr 2020) shows total consideration ₹40,242 cr (1Shyam Ltd. negotiates merger with Ram Ltd. Key dates: 9 Apr (start), 10 May (board authoriIn a reverse acquisition (legal acquirer ABX is shell; accounting acquirer BX is larger opContinuing the example: NCI proportionate at 30% of ₹516.5 = ₹154.95; PC = ₹87.43 lakh (₹5Continuing the Professional/Dynamic example: PPE FV ₹350 lakh (BV ₹500 lakh), contingent l