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AS 27 provided an exemption from proportionate consolidation when the joint venture was 'acquired and held exclusively with a view to its subsequent disposal in the near future'. Under Ind AS 111:
AThe exemption applies only to listed entities
BInd AS 111 / Ind AS 28 do not provide a similar exemption; the only relevant carve-out is when the interest meets Ind AS 105 held-for-sale criteria, in which case Ind AS 105 (not equity method) applies
CThe same exemption is retained verbatim
DEquity method applies regardless of intent — no exemption ever
Answer & Solution
Correct answer: B. Ind AS 111 / Ind AS 28 do not provide a similar exemption; the only relevant carve-out is when the interest meets Ind AS 105 held-for-sale criteria, in which case Ind AS 105 (not equity method) applies
Ind AS 111/28 do NOT mirror the AS 27 'near-future disposal' exemption. The only operative carve-out is the Ind AS 105 held-for-sale route, which overrides equity method when the criteria are met. This is a documented difference between Ind AS 111 and AS 27.
Related questions
Identify the statement that is INCORRECT about acquiring an interest in a joint operation Identify the BEST description of how a joint operator accounts for its interest in a jointWhen an entity contributes ONLY ASSETS or GROUPS OF ASSETS THAT DO NOT CONSTITUTE BUSINESSWhen a party that previously merely PARTICIPATED in a joint operation (no joint control) sSale BY a joint operator TO its joint operation: when the transaction provides evidence ofWhere the transaction acquiring an additional interest in a joint operation (which is a buA Ltd. has 60% interest in a joint operation. A Ltd. PURCHASES an asset from the JO; the JUnder Ind AS 111, an entity classified an interest as a jointly controlled ENTITY under AS