Resolved – No requirement to present third balance sheet in case of business combination. ITFG Bulletin 22 date Oct 14, 2019– Issue 5.

If you have either faced the scenario of business combination under common control or have audited (applicable to me) such scenario, you would have wondered about the requirement of presenting third balance sheet. This was a questionable topic till there was a clarification from ITFG.

As per Para 9, Appendix C of Ind AS 103, financial information in the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.

By this clarification, ITFG has relieved industry from presenting third balance sheet, in case the business combination under common control has occurred after the first day of the comparative period. The requirement continues if the business combination was prior to the first day of the comparative period.

Though there is a clarification on this issue, we still see industry proposing for restatement and hence this attempt.