IAS 27 - Separate Financial Statements

Topic

IFRS

VAS

IAS 27 – Separate Financial Statements

Objective

To prescribe how to account for investment in subsidiaries, joint ventures, and associates in Separate Financial Statements.

No equivalent VAS.

Requirements for

Separate Financial

Statements

IAS 27 does not mandate which entities produce Separate Financial Statements available for public use. It applies when an entity prepares Separate Financial Statements that comply with IFRS.

Separate financial statements are those presented in addition to consolidated financial statements or in addition to the financial statements of an investor that does not have investments in subsidiaries but has investments in associates or joint ventures in which the investments in associates or joint ventures are required by IAS 28 to be accounted for using the equity method, other than in the exempt circumstances. The financial statements of an entity that does not have a subsidiary, associate or joint venturer’s interest in a joint venture are not separate financial statements

No equivalent VAS.

Accounting

method

When an entity prepares separate financial statements, it shall account for investments in subsidiaries, joint ventures and associates either:

(a) At cost;

(b) In accordance with IFRS 9; or

(c) using the equity method as described in IAS 28.

The entity should apply the same accounting for each category of investments.

VAS 25 only allows cost method to recognize investments in subsidiaries, joint ventures, and affiliated company on parent company's financial statements.

Recognition of

dividends

Dividends from a subsidiary, a joint venture or an associate are recognised in the separate financial statements of an entity when the entity’s right to receive the dividend is established. The dividend is recognised in profit or loss unless the entity elects to use the equity method, in which case the dividend is recognised as a reduction from the carrying amount of the investment.

VAS 14 also applies the same principle for dividend recognition of all investments.

Group reorganization

When a parent reorganises the structure of its group by establishing a new entity as its parent in a manner that satisfies the following criteria:

(a) the new parent obtains control of the original parent by issuing equity instruments in exchange for existing equity instruments of the original parent;

(b) the assets and liabilities of the new group and the original group are the same immediately before and after the reorganisation; and

(c) the owners of the original parent before the reorganisation have the same absolute and relative interests in the net assets of the original group and the new group immediately before and after the reorganisation.

No equivalent VAS.