Home › CA Final › financialreporting › Ind AS 111 — Joint Operation Accounting, Acquisition of Interest as Business & AS 27 vs Ind AS 111 › When an entity contributes ONLY ASSETS or GROUPS…
When an entity contributes ONLY ASSETS or GROUPS OF ASSETS THAT DO NOT CONSTITUTE BUSINESSES to a newly formed joint operation, the Ind AS 103 acquisition-method principles:
AApply fully
BApply only to goodwill
CDo NOT apply — the business-combination principles only apply if at least one party contributes an EXISTING BUSINESS
DApply only to deferred tax
Answer & Solution
Correct answer: C. Do NOT apply — the business-combination principles only apply if at least one party contributes an EXISTING BUSINESS
The Ind AS 111 carve-in to Ind AS 103 is triggered only when an EXISTING BUSINESS is contributed. Pure asset contributions remain outside the BC framework — they're accounted under the relevant Ind AS on assets (e.g. Ind AS 16, Ind AS 38).
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 jointAS 27 provided an exemption from proportionate consolidation when the joint venture was 'aWhen 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