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Financial Reporting · Ind AS 27 Separate Financial Statements

Ind AS 27: Disclosures and Differences from IAS 27

Updated 5 October 2026 · Fact-checked

Ind AS 27 requires an entity preparing separate financial statements to say they are separate, list significant investments with ownership details, and state the accounting method used. The exact items depend on the preparer. It differs from IAS 27 mainly because it omits the equity method option: only cost or Ind AS 109 is allowed.

Understand Disclosures and Differences from IAS 27

Separate financial statements are the statements an entity presents in addition to its consolidated statements (or in addition to statements where it equity-accounts its associates and joint ventures). In them, investments in subsidiaries, joint ventures and associates are shown as investments, not consolidated line by line.

Because these statements show only the investor's own position, users need context. The disclosure rules supply it. They tell the reader that the statements are separate, which investments matter, and how those investments were measured. Depending on the preparer, they also point to the related consolidated statements.

The disclosures fall into three situations:

  • Parent that uses the consolidation exemption (and prepares separate statements as its only statements): disclose the fact that the statements are separate and that the exemption has been used, the name and principal place of business (and country of incorporation, if different) of the entity whose Ind AS consolidated statements are available for public use, and the address where they can be obtained. Also give the list of significant investments and the method.
  • Investment entity parent that must measure subsidiaries at fair value through profit or loss and prepares separate statements as its only statements: disclose that fact and the investment-entity disclosures required by Ind AS 112.
  • Any other parent, or an investor with joint control or significant influence, that prepares separate statements: disclose that the statements are separate and the reasons for preparing them if not required by law. Identify the statements prepared under Ind AS 110, Ind AS 111 or Ind AS 28 to which they relate. Also give the list of significant investments and the method.

The key difference from IAS 27 is the accounting choice. IAS 27 lets an entity measure these investments at cost, in line with the financial instruments standard, or using the equity method. Ind AS 27 does not include the equity method option. This is an Ind AS deviation from IAS 27. In India you choose cost or Ind AS 109 and apply the same choice to each category of investment (subsidiaries, joint ventures, associates).

The other differences are mostly cross-references: Ind AS 109, Ind AS 105, Ind AS 110, Ind AS 111 and Ind AS 28 replace the IFRS numbers. In a comparison answer, lead with the equity method difference.

Key rules to remember

Permitted measurement in separate FS (Ind AS 27)
Investment in subsidiary / JV / associate = Cost OR Ind AS 109 (fair value)
Apply the same accounting to each category of investment. The equity method is not an option in separate FS under Ind AS 27.
IAS 27 position (for comparison)
Cost OR IFRS 9 OR Equity method
The third option is the difference. Ind AS 27 does not carry it.
Held for sale exception
Investment accounted for at cost and classified as held for sale → Ind AS 105
Investments measured under Ind AS 109 are not re-measured under Ind AS 105 on classification as held for sale. Their Ind AS 109 measurement is unchanged.
Dividend income in separate FS
Recognise in profit or loss when the right to receive the dividend is established
The dividend is not deducted from the cost of the investment.
Disclosures when the consolidation exemption is used
Fact that FS are separate + exemption used + name and principal place of business (and country of incorporation if different) of the entity whose Ind AS consolidated FS are public + address where obtainable + list of significant investments + method
The list gives name, principal place of business, country of incorporation if different, proportion of ownership interest and, if different, proportion of voting rights.
Disclosures for other separate FS
Fact that FS are separate + reasons if not required by law + identify the Ind AS 110 / 111 / 28 statements they relate to + list of significant investments + method
The list and method follow the same detail as in the exemption case.

How to solve Disclosures and Differences from IAS 27 questions

Use this order for any question on disclosures or on Ind AS 27 versus IAS 27.

  1. 1Identify who is preparing the separate FS: a parent using the consolidation exemption, an investment entity parent, or another parent or investor.
  2. 2Pick the matching disclosure set. Do not mix the sets.
  3. 3Write the common disclosures: the statements are separate FS, the list of significant investments, and the method used.
  4. 4For the exemption case, add: the exemption has been used, the name and principal place of business of the entity producing public Ind AS consolidated statements, and where to obtain them.
  5. 5For the other-parent or investor case, add: the reasons for preparing separate FS if not required by law, and identification of the Ind AS 110, 111 or 28 statements they relate to.
  6. 6If the question is about measurement, state that only cost or Ind AS 109 is allowed, applied by category. Mention Ind AS 105 for held-for-sale investments accounted for at cost.
  7. 7If the question is a comparison, state the IAS 27 position (cost, IFRS 9 or equity method), then the Ind AS 27 position, then the effect on carrying amount.
  8. 8Compute any carrying amount under the permitted method and conclude with a clear recommendation.

Quickest way: Three-line answer for differences and disclosures

When to use it: Use it for short-answer questions, theory parts of case scenarios, and when time is short.

  1. Line 1: name the reporting situation and the disclosure set that applies.
  2. Line 2: give the list items: separate FS fact, significant investments, method, plus the extra item for that situation (exemption details, or related statements and reasons).
  3. Line 3: state the difference: IAS 27 allows the equity method in separate FS, Ind AS 27 allows only cost or Ind AS 109.

Common mistakes in Disclosures and Differences from IAS 27

  • Saying equity method is allowed in separate FS under Ind AS 27 because IAS 27 allows it.

    Students read the IFRS text and assume Ind AS is identical.

    Fix: Remember the deviation from IAS 27. Equity method belongs to consolidated FS under Ind AS 28 and Ind AS 111, not to separate FS under Ind AS 27.

  • Giving one disclosure list for all situations.

    The disclosure paragraphs look similar, so they get merged.

    Fix: First classify the preparer: exemption-using parent, investment entity, or other. Then give the matching list.

  • Mixing measurement methods within one category, for example cost for one subsidiary and fair value for another.

    Students treat each investment as a free choice.

    Fix: Apply the same accounting to each category (subsidiaries, joint ventures, associates). Different categories may use different methods.

  • Deducting dividends received from the cost of investment.

    This was an older practice for pre-acquisition profits.

    Fix: Recognise the dividend in profit or loss when the right to receive it is established.

  • Forgetting that held-for-sale investments follow Ind AS 105, or applying Ind AS 105 to all of them.

    Students focus only on cost or fair value, or assume the rule covers both options.

    Fix: Investments accounted for at cost that are classified as held for sale are accounted for under Ind AS 105. The measurement of investments under Ind AS 109 does not change.

  • Listing every investment instead of significant ones, or omitting the method.

    Students memorise the list loosely.

    Fix: Write list of significant investments, then the details, then description of the method used.

Worked examples

Example 1

Alpha Ltd is a wholly owned subsidiary of Beta Ltd. Beta prepares consolidated Ind AS financial statements that are available for public use. Alpha has two subsidiaries and chooses not to prepare consolidated statements. It prepares separate financial statements as its only statements. What must Alpha disclose?

Show the solution
  1. Alpha uses the consolidation exemption and its separate FS are its only FS. The exemption-case disclosure set applies.
  2. Alpha states that the statements are separate financial statements and that it has used the exemption from consolidation.
  3. It names Beta Ltd, gives Beta's principal place of business (and country of incorporation if different), and gives the address where Beta's consolidated statements can be obtained.
  4. It lists its significant investments in subsidiaries, joint ventures and associates: name, principal place of business, country of incorporation if different, proportion of ownership interest and, if different, proportion of voting rights held.
  5. It describes the method used to account for these investments, which must be cost or Ind AS 109.

Answer: Alpha discloses the separate FS and exemption facts, Beta's name and place, where Beta's consolidated FS can be obtained, the list of significant investments with the required details, and the accounting method used (cost or Ind AS 109).

Example 2

Gamma Ltd holds 40% in Delta Ltd, an associate, acquired for ₹50,00,00,000. Delta earned a profit of ₹25,00,00,000 after acquisition, and Gamma's share is ₹10,00,00,000. No dividend was received. Gamma's CFO says IAS 27 allows the equity method in separate FS, so Gamma should show the investment at ₹60,00,00,000. Advise.

Show the solution
  1. Gamma reports under Ind AS, so Ind AS 27 applies, not IAS 27.
  2. Paragraph 10 of Ind AS 27 permits cost or Ind AS 109 for investments in associates in separate FS. The equity method option that IAS 27 contains is not carried into Ind AS 27. This is where Ind AS 27 differs from IAS 27.
  3. Share of profit: 40% × ₹25,00,00,000 = ₹10,00,00,000. This would be added only under the equity method, which Gamma cannot choose in its separate FS.
  4. Under the cost option: carrying amount = ₹50,00,00,000, and no share of profit is recognised. Only dividends, if any, are income.
  5. Under the Ind AS 109 option: the investment is measured as a financial asset at fair value. The fair value is not given here, so no figure can be computed. Gamma must apply the chosen method (cost or Ind AS 109) to all its investments in associates.
  6. The equity method result of ₹50,00,00,000 + ₹10,00,00,000 = ₹60,00,00,000 is shown only in the financial statements where Ind AS 28 is applied, such as consolidated FS.

Answer: The CFO is wrong. In Gamma's separate FS the investment is at ₹50,00,00,000 under cost, or at fair value under Ind AS 109, applied consistently to the category of associates. The ₹60,00,00,000 equity-method figure appears only in consolidated FS.

Exam tips

  • Whenever the question says 'differences from IAS 27', start with the missing equity method option and then give the cross-reference changes.
  • In case scenarios, check first whether the entity used the consolidation exemption. That decides the disclosure set.
  • Write the disclosure list as bullets: fact that the FS are separate, the situation-specific items, investments, method.
  • Use a short number example, such as cost against equity method carrying amount, to show you understand the difference.
  • Past RTP and MTP style questions often combine this topic with group reorganisation or dividends, so link the answer to both when relevant.

Practice questions from Ind AS 27 Separate Financial Statements

Disclosures and Differences from IAS 27 in other exams

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

Disclosures and Differences from IAS 27: frequently asked questions

Does Ind AS 27 allow the equity method in separate financial statements?

No. Ind AS 27 allows only cost or Ind AS 109 for investments in subsidiaries, joint ventures and associates. IAS 27 also allows the equity method, and Ind AS 27 does not carry that option. The equity method is used in consolidated FS under Ind AS 28.

What is the main difference between Ind AS 27 and IAS 27?

The main difference is that Ind AS 27 omits the equity method option for separate financial statements. The other differences are cross-references to the Ind AS equivalents, such as Ind AS 109 and Ind AS 105.

What are the disclosure requirements of Ind AS 27?

The entity states that the statements are separate, lists significant investments with ownership details and describes the accounting method. A parent using the consolidation exemption also states that it used the exemption, names the entity whose public Ind AS consolidated statements exist and says where they can be obtained. Other parents and investors give the reasons for preparing separate FS if not required by law and identify the related Ind AS 110, 111 or 28 statements.

Can I use different methods for different investments in separate FS?

You can choose different methods for different categories (subsidiaries, joint ventures, associates), but you must apply the same method to every investment within a category. Held-for-sale investments accounted for at cost follow Ind AS 105, while those under Ind AS 109 keep their Ind AS 109 measurement.