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Mergers and demergers approved by the Tribunal, group restructurings and consolidation choices raise recurring Ind AS questions: when control passes, which amounts a transferee records, how comparatives are restated and what a parent does with partly owned or foreign associates. This digest restates ITFG's answers in our own words and checks each against the Ind AS paragraph relied on.
ITFG clarifications are the views of ICAI's Ind AS Technical Facilitation Group as on the date of each bulletin; they are not standards. On combinations, ITFG says that a common control combination is pooled at carrying amounts with comparatives restated from the start of the preceding period (and only for the transferee), that a Tribunal-approved appointed date becomes the acquisition date, and that a merger of a subsidiary into its parent or of sister companies is eliminated in the consolidated statements. On consolidation it says depreciation methods are estimates, not policies, and that an associate's accounts are redrawn on Ind AS unless that is impracticable.
Ind AS as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015). Amendments notified after 1 April 2025 are not reflected in this article and should be checked on mca.gov.in. Restructurings of this kind usually need a financial and legal due diligence review before the scheme is filed.
How to read the tables
Each issue is cited by bulletin and issue as printed at the end of the answer; the compendium numbers them differently. The last column says whether the paragraph relied on reads the same in the compendium text. The standards behind these answers are covered in our guides to business combinations, common control combinations under Appendix C of Ind AS 103, consolidation procedure and the equity method. For the merger provisions of the Act, see Section 232.
Digest: mergers and demergers
| Situation | ITFG's view | Reference | Paragraph relied on; still the same? |
|---|---|---|---|
| Acquisition date where a Tribunal scheme has an earlier appointed date | Acquisition date is the date control passes; the auditor flags a different date in the certificate required for the scheme; if the Tribunal approves a different appointed date, that date is the acquisition date, with disclosure. For common control, comparatives are restated from the start of the preceding period | ITFG Clarification Bulletin 12, Issue 8 | Ind AS 103, paragraphs 8-9; Appendix C, paragraph 9: reads the same |
| Amounts used when sister companies merge, or a subsidiary merges into its parent | Carrying amounts from the combining entities' books; for a subsidiary into its parent, amounts as in the group's consolidated statements. The merger is eliminated in the parent's consolidated statements | Bulletin 9, Issue 2 | Appendix C, paragraphs 9, 11, 12; Ind AS 110, paragraph B86: reads the same |
| Tribunal approval received after the year end with an earlier appointed date | The merger is an adjusting event and is reflected in the year just ended | Bulletin 14, Issue 4 | Ind AS 10, paragraphs 3 and 22(a): reads the same on the point relied on |
| A group demerger before the transferee's date of transition | Accounted under Appendix C in the comparative year unless the scheme prescribes a different treatment, which then prevails with disclosure | Bulletin 16, Issue 5 | Appendix C; Ind AS 101: reads the same |
| A division transferred to a subsidiary within a group | Common control from the transferee's side; pooled; comparatives restated from the start of the preceding period | Bulletin 19, Issue 5 | Appendix C, paragraph 9(iii): reads the same |
| Is a third balance sheet needed for a merger restated under Appendix C? | No, unless that date is also the date of transition | Bulletin 22, Issue 5 | Ind AS 1, paragraph 10(f); Appendix C: reads the same |
| Restating comparatives for a demerger with a later appointed date | The transferee restates as if from the start of the comparative period; the transferor does not restate but considers Ind AS 105 disclosure | Bulletin 22, Issue 6 | Appendix C, paragraph 9: reads the same |
| An investor's separate accounts when two associates demerge | Split the carrying amount by relative fair values; the new shares' cost is the amount derecognised where no exchange has occurred; not for other demerger types | Bulletin 20, Issue 4 | Ind AS 8, paragraphs 10-12; Ind AS 27, paragraph 10: reads the same |
Digest: consolidation, investment entities and associates
| Situation | ITFG's view | Reference | Paragraph relied on; still the same? |
|---|---|---|---|
| A parent's stake falls from 70 to 60 per cent through another investor's new funds, with control kept | Separate accounts: no change in carrying amount, disclose; consolidated: an equity transaction with no effect on goodwill or profit | Bulletin 13, Issue 7 | Ind AS 110, paragraphs 23, B96; Ind AS 112, paragraph 18: reads the same |
| Parent and subsidiary use different depreciation methods | Allowed: method is an estimate reflecting the pattern of use, not a policy to be made uniform | Bulletin 11, Issue 6 | Ind AS 110, paragraphs 19, B87; Ind AS 16, paragraphs 60-61: reads the same |
| Retired partners' capital repayable on demand in a controlled firm | A financial liability at fair value; with a demand feature no discounting | Bulletin 15, Issue 9 | Ind AS 113, paragraph 47: reads the same |
| An investment entity moves its holdings under a new wholly owned entity | It remains an investment entity and so does the new entity, as the substance is unchanged; the exit-strategy rule is met through the new entity | Bulletin 20, Issue 2 | Ind AS 110, paragraphs 27, 31-33, B85H: reads the same |
| Joint venture in an LLP in the investor's separate accounts | Cost or Ind AS 109 only; no adjustment of profit share to carrying amount; profit share is income when the right arises | Bulletin 5, Issue 8 | Ind AS 111, paragraph 26; Ind AS 27, paragraph 10: reads the same |
| Investment in a subsidiary at transition-date fair value | That value is its cost afterwards | Bulletin 3, Issue 12 | Ind AS 101, D15; Ind AS 27, paragraph 10: reads the same |
| Equity method where the investee holds investment property at cost | No conflict between Ind AS 40 and Ind AS 28: fair values at acquisition drive the investor's adjustments to its share of profit | Bulletin 17, Issue 5 | Ind AS 28, paragraph 32; Ind AS 110, paragraph 25: reads the same |
| An overseas associate on local accounting rules | Redraw its accounts on Ind AS for equity accounting unless impracticable: business combinations, depreciation method and useful lives | Bulletin 20, Issue 5 | Ind AS 28, paragraphs 35-36: reads the same, with a later exception (paragraph 36A) for investment entity associates |
Issues left out
Compendium issue 74, which concerns a tax on dividends that was later withdrawn, is left out; see our income-tax guides for tax matters.
Three answers explained
Appointed date and acquisition date (Bulletin 12, Issue 8). Ind AS 103 treats the acquisition date as the date control passes (paragraph 8), usually the closing date but possibly earlier or later on the facts (paragraph 9). ITFG adds that where a Tribunal approves an appointed date, that is the date used, and the auditor's certificate under the Act should state any difference. For a common control merger the date matters less for the figures than for restating the preceding period.
Restating comparatives (Bulletins 19 and 22). Appendix C, paragraph 9(iii), requires prior-period information to be restated as if the combination had occurred from the beginning of the preceding period, whatever the appointed date, but only for the transferee. The transferor, in a demerger, looks to Ind AS 105 rather than restating.
Overseas associates (Bulletin 20, Issue 5). Paragraph 35 of Ind AS 28 requires uniform policies for like items unless impracticable for an associate, and paragraph 36 requires adjustment. ITFG treats the redrawn accounts as special-purpose statements for equity accounting, which do not replace the associate's statutory accounts.
What a finance team should take from this
- Decide early whether a scheme is common control; the method, the restatement and the acquisition date follow.
- Reconcile the scheme's appointed date with the date control passes, and get the auditor's certificate wording right.
- For consolidation, separate policies (uniform) from estimates (may differ).
Need help with a merger or consolidation?
If a scheme or group restructuring is being planned, our team can review the structure, the accounting under Appendix C and the effect on consolidated statements as part of financial and legal due diligence.
Key takeaways
- Common control combinations are pooled at carrying amounts, restated from the start of the preceding period, for the transferee only.
- A Tribunal-approved appointed date can become the acquisition date, and a post-year-end approval of an earlier date is an adjusting event.
- Mergers within a group are eliminated on consolidation.
- Depreciation method is an estimate; an associate's policies are conformed unless impracticable.
Read next
- Business combination under Ind AS 103: acquisition method
- Common control business combinations under Appendix C of Ind AS 103
- Consolidation procedure under Ind AS 110
- Equity method under Ind AS 28
Disclaimer: Based on the Indian Accounting Standards as on 1 April 2025 (ICAI Compendium of Ind AS 2025-26, the standards notified under the Companies (Indian Accounting Standards) Rules, 2015) and, where named, the ITFG clarification bulletins of ICAI, as consulted on 4 October 2026. Amendments notified after 1 April 2025 should be checked on mca.gov.in. This article is general information, not legal advice; check the official text before acting.