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CA Final · Financial Reporting

Ind AS 27 Separate Financial Statements: CA Final Financial Reporting Study Guide

Ind AS 27 sets the accounting and disclosure rules for separate financial statements, which an entity presents in addition to or instead of consolidated ones. Investments in subsidiaries, joint ventures and associates are carried at cost or in accordance with Ind AS 109. Pick one policy per category and apply it consistently. Dividends go to profit or loss.

What this chapter covers

The chapter is small, so it is cheap to learn and easy to score on. It appears as MCQs and short written parts, often combined with consolidation or Ind AS 109 questions. Because the rules are few and precise, a clear grasp of the policy choices and the dividend treatment lets you answer confidently where others guess. It also strengthens your consolidation answers, since you must know what is left out of consolidation and why.

Ind AS 27 Separate Financial Statements: topics in the order to study them

  1. 1Ind AS 27 Objective, Scope and DefinitionsStart here to learn what separate financial statements are and how they differ from consolidated and individual statements, since every later rule builds on these terms.
  2. 2Preparation of Separate Financial StatementsThis is the core accounting: the choice of cost or Ind AS 109, the consistency rule, and the link to held for sale and investment entities.
  3. 3Dividends in Separate Financial StatementsLearn this after the measurement rules, because dividend recognition applies to the investments you have just measured. Treat impairment under Ind AS 36 as a separate step.
  4. 4Disclosures and Differences from IAS 27Finish with disclosures and the differences from the international standard, including the absence of the equity method option, which are easier to recall once the main rules are clear.

How to prepare Ind AS 27 Separate Financial Statements

This is a short chapter, so aim to finish it quickly and spend the saved time on practice. Work through the standard in the order below.

  1. Read the definitions first and write one line each for consolidated, separate and individual financial statements. Be able to say who may or must present separate statements.
  2. Build a small table for the three investment categories against the two measurement options: cost and Ind AS 109. Add the rule that the choice is made per category and applied consistently.
  3. Learn the dividend rule: recognised in profit or loss when the right to receive is established. Treat any impairment test of the investment as a separate matter under Ind AS 36.
  4. Practise a fixed sequence on short scenarios: check first whether the investment is held for sale (Ind AS 105), then apply the policy for its category, then deal with any dividend and any impairment.
  5. Link the chapter to Ind AS 110, 109, 105 and 101 by writing a one-page map showing which standard supplies the rule for each situation.
  6. Solve case scenario MCQs and two or three short written questions. Answer in rule, facts, conclusion form and check each against the standard.
  7. Learn the disclosure list and the points where Ind AS 27 differs from IAS 27, and revise them at the end of each week.

Common mistakes in Ind AS 27 Separate Financial Statements

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      Ind AS 27 Separate Financial Statements practice questions

      Ind AS 27 Separate Financial Statements in other exams

      The same ground in other exams, if you are preparing for more than one or want another angle on it.

      Ind AS 27 Separate Financial Statements: frequently asked questions