AS 103 will recognise the bargain purchase

It is pertinent to note that the Ministry of Corporate Affairs has carved out the treatment of bargain purchase, while converging Indian Standards towards IFRS 3. It will create a GAAP difference in which Converged Indian AS 103 will recognise the bargain purchase in other comprehensive income (OCI) and accumulated in equity as capital reserve if there is a clear evidence of the underlying reason for classification of the business combination as a bargain purchase; otherwise, the resulting gain is recognised directly in equity as capital reserve.


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