ICAI CA Inter - AS 21 Consolidated Financial Statements
CASE - Bonus Issue from Post acquisiton Profits (ILLUSTRATION 9)
Link - https://resource.cdn.icai.org/74712bos60485-inter-p1-cp10-u1.pdf
While calculating cost of control share capital is increased but I think it is wrong because as per AS 21 we take the share capital at the date of acquisition and if the bonus issue is after the date of acquisiton, then we shouldn't increase the share capital.
Please correct me with reasoning !
Under AS 21, goodwill is based on net assets at acquisition date. A bonus issue from post-acquisition profits only reallocates equity between reserves and share capital without changing total net assets. Therefore, share capital increases for presentation, but cost of control remains unaffected.
Thanks for replying back.. but I think what you just stated is in the case of bonus issue from pre profits not post profit... Please recheck once
CAclubindia
