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CA Final · Financial Reporting · Ind AS 27 Separate Financial Statements

Anaya Ltd has elected under Ind AS 28 to measure its investment in associate B at fair value through profit or loss, as it is held by a venture capital organisation. It also has a joint venture J and prepares separate financial statements. What must Anaya do for B in its separate financial statements?

Anaya must account for associate B at fair value through profit or loss under Ind AS 109 in its separate financial statements too. Ind AS 27 requires that an Ind AS 28 election to use FVTPL be followed in the same way in the separate financial statements.

  1. AMeasure B at cost, since separate statements must use cost for associates
  2. BAccount for B at FVTPL under Ind AS 109, in the same wayCorrect
  3. CApply the equity method to B only
  4. DMeasure B at FVTOCI with dividends in profit or loss

Explanation

Ind AS 27 states that if an entity elects under Ind AS 28 to measure investments in associates or joint ventures at FVTPL under Ind AS 109, it must also account for those investments in the same way in its separate financial statements. Cost is therefore not allowed for B.

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