Home › CA Final › financialreporting › Ind AS 103 — Closing Illustrations: Reverse Acquisition Consolidated BS, Contingent Consideration Classification, Transitory Common Control › Continuing the reverse acquisition: in the conso…
Continuing the reverse acquisition: in the consolidated balance sheet, Issued Equity is presented as:
AFV of entire combined entity at acquisition
BPre-merger equity of Entity B (₹600) only
C₹600 (Entity B's pre-merger equity at par)
DPre-merger equity of Entity B + FV of consideration effectively transferred = ₹600 + ₹1,600 = ₹2,200; structurally shown in terms of LEGAL parent's (Entity A's) equity instruments — 250 ordinary shares
Answer & Solution
Correct answer: D. Pre-merger equity of Entity B + FV of consideration effectively transferred = ₹600 + ₹1,600 = ₹2,200; structurally shown in terms of LEGAL parent's (Entity A's) equity instruments — 250 ordinary shares
Reverse-acquisition consolidated equity = pre-combination issued equity of accounting acquirer + FV of consideration effectively transferred. The equity STRUCTURE (number and type of shares) shown is that of the legal parent (250 ordinary shares of Entity A).
Related questions
An acquirer takes control on 1 Nov 20X1. Cash consideration ₹59 lakh; 1 lakh shares × ₹10 Identify the statement about reverse acquisition consolidated FS that is INCORRECT.Consider 2 lakh acquirer shares issued as contingent consideration with FV ₹25 lakh at acqWhen the acquirer measures NCI at the FAIR VALUE method vs the PROPORTIONATE method, the dF acquired G. After acquisition, F's loan to G's customer B was provisionally valued at FVBargain purchase: Alpha acquires 80% of Beta. Beta's identifiable net assets (₹500 assets A holds 5% in B at FVOCI (Ind AS 109 election). FV unrealised gain in OCI = ₹5,000; carryiGoodwill impairment under NCI-at-FV vs NCI-at-proportionate-share methods: share exchange