Ind AS 103, Business Combinations provides a structured framework for accounting of business combinations including guidance related to topics such as assessing whether the acquired set of activities and assets constitute a business, identification of acquirer and acquisition date, measuring consideration, measuring non-controlling interests, etc. A critical consideration in accounting for business acquisitions is the classification of the acquired set of activities and assets as either a business or a group of assets. This classification impacts how the transaction is reported in financial statements. Given the complexities involved, Ind AS 103 provides an acquirer with a choice of using a simplified approach, referred to as the ‘concentration test’, to determine whether the acquired set of assets and activities constitute a business or not. This edition of Accounting and Auditing Update (AAU) includes an article that discusses the key principles while using the optional concentration test.
In September 2021, the Government of India had introduced the Production Linked Incentive Scheme for Automobile and Auto Component Industry (auto sector) (PLI Scheme). The PLI Scheme provides financial incentives to boost the domestic capability of manufacturing of Advanced Automotive Technology (AAT) products and attract investments in the automotive manufacturing value chain. This publication features an article that provides an overview of the PLI scheme. The article, inter-alia, discusses the basic eligibility criteria and annual performance conditions for being eligible to claim the incentive under the scheme, the claim application process and key accounting considerations for applicants. As always, we have included a regular round-up of recent regulatory updates in India and internationally. As always, we have included a regular round-up of recent regulatory updates in India and internationally.
We would be delighted to receive feedback and suggestions from you on the topics we should cover in forthcoming editions of AAU.
For more information on this update, please write to aaupdate@kpmg.com.
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