Case: Let say Xltd purchased 90% Share of Yltd. Its a business combination as per Ind As 103 and on initial recognition all assets and lìab shall be recored at fair value In CFS accounts
Now let say in Yltd books there was a PPE with net value of 100, but its fair value was 150 om acquision date and hence it has been initially recorded in CFS accounts at 150.
Now how will be the same be treated while preparing the consolidated accounts of next year?
IndAS 103.54 "In general, an acquirer shall subsequently measure and account for assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination in accordance with other applicable Ind ASs for those items, depending on their nature."
Now, that means Y ltd's PPE will be measured next year either at cost or revaluation model. What ever the amount arises from the valuation, it is recognised in the consolidated statements.
INDAS110.B88 "An entity includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the entity ceases to control the subsidiary. Income and expenses of the subsidiary are based on the amounts of the assets and liabilities recognised in the consolidated financial statements at the acquisition date. For example, depreciation expense recognised in the consolidated statement of profit and loss after the acquisition date is based on the fair values of the related depreciable assets recognised in the consolidated financial statements at the acquisition date."
So its like Parents assets + Subsidiary assets. Both of these company assets will be separately valued as per their subsequent measurements as per PPE standard and consolidate their values at fair value.
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