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Plz help

BHAWNA NATHRANI (CA) (57 Points)

29 December 2012

Can we say that Ind As are the moulded form of IFRS which are placed by MCA to be applicable to the Indian Company

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Durga Prasad (Trainee) (392 Points)
Replied 29 December 2012

I'm also eager to know about that......

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Amit Ashok Chawla (Corporate Trainer) (383 Points)
Replied 05 January 2013

Yes these are (literally) moulded form of IFRS to suit Indian environment. However, these do not carry a global acceptance.

I would be glad to offer answer to specific questions you may have on differences.

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BHAWNA NATHRANI (CA) (57 Points)
Replied 05 January 2013

whats the major difference in AS- 21 ,23 & 27 and its related IFRS.?

Amit Ashok Chawla (Corporate Trainer) (383 Points)
Replied 06 January 2013

The basis is defined through AS 21. Goodwill under IAS 27 / IFRS 3 (Business Combinations) is calculated on the bais of fair value rather than book value.

Goodwill is not amortised since it has an indefinite useful life. However, the goodwill is impaired.

Consolidation is not done on the basis of %, but on the basis of control. Imagine a situation that an Indian company buys a stake in another Indian company of 49%. Hence, these are consolidated due to statute requirements. However, majority of decision making etc is done by acquiring company. In a way, the first company is able to manipulate the accounts through a limited stake in another company (by selling NPAs, bad loans, non-recoverable dues to other company, hence making bad debts good). However, IAS 27 says that each company which is controlled by another company has to be consolidated irrespective of share-holding.

Similar aspects are there for AS 23 / AS 27.

I hope this helps you

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BHAWNA NATHRANI (CA) (57 Points)
Replied 07 January 2013

That means now consolidation will be on the basis of power to direct the financial & Planning decision not on % of holding.

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Amit Ashok Chawla (Corporate Trainer) (383 Points)
Replied 07 January 2013

Dear Bhawna,

Yes, the definition of control is not difficult to understand but requires judgemental approach as to who controls (substance over form).

For the purposes of consolidation, percentage of holding has little bearing. Although, when it is not clear that who controls whom, % can be used as a benchmark.

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