Home › CA Final › financialreporting › Ind AS 103 — Reverse Acquisition Mechanics, Replacement Awards, Contingent vs Deferred Consideration & NCI Methods › Shyam Ltd. negotiates merger with Ram Ltd. Key d…
Shyam Ltd. negotiates merger with Ram Ltd. Key dates: 9 Apr (start), 10 May (board authorisation), 15 May (offer made), 31 May (Ram board accepts subject to vote), 2 Jun (joint press release), 10 Jun (shareholders approve), 15 Jun (shares allotted). Share prices on these dates: 70, 75, 60, 70, 80, 85, 90. Acquisition date and PC?
A31 May (acceptance by Ram's board); PC = 12,000 × ₹70 = ₹8.40 lakh
B15 Jun (share allotment — control passes when shares are issued); PC = 12,000 × ₹90 = ₹10.80 lakh
C9 Apr (negotiation start); PC = 12,000 × ₹70 = ₹8.40 lakh
D10 Jun (shareholder approval); PC = 12,000 × ₹85 = ₹10.20 lakh
Answer & Solution
Correct answer: B. 15 Jun (share allotment — control passes when shares are issued); PC = 12,000 × ₹90 = ₹10.80 lakh
Even with shareholder approval on 10 Jun, control actually passes on 15 Jun when shares are allotted to Ram's shareholders. PC measured at acquisition-date share FV = 12,000 × ₹90 = ₹10,80,000.
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