Ind AS 103: Business Combinations#
Scope#
Applies to all business combinations except:
- Joint ventures
- Business combinations under common control
- Not-for-profit organizations (with exceptions)
Recognition Principles#
At acquisition date:
- Identify the acquirer
- Determine acquisition date
- Recognize identifiable assets, liabilities, and NCI
- Recognize goodwill or gain from bargain purchase
Purchase Price Allocation#
Consider transfer measured at fair value:#
- Cash paid
- Equity instruments issued
- Liabilities assumed
- Contingent consideration
Identifiable Assets & Liabilities#
Recognize at fair value:
- Tangible assets (PPE, inventory)
- Intangible assets (patents, trademarks)
- Liabilities (debt, provisions)
- Contingent liabilities (if measurable)
Goodwill Testing#
Goodwill = Consideration + NCI - Fair Value of Net Assets
Goodwill is tested annually for impairment.
Disclosure Requirements#
- Description of the business combination
- Acquisition date and method
- Goodwill amount and description
- Fair value of consideration transferred
- Details of contingent consideration