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

Dhruv Ltd accounts for its investment in subsidiary S in separate financial statements in accordance with Ind AS 109, and the investment is classified as held for sale at the year end. Which statement is correct under Ind AS 27?

The Ind AS 109 measurement stays unchanged. Ind AS 27 applies Ind AS 105 only to investments carried at cost, and it states explicitly that held-for-sale classification does not change the measurement of investments accounted for under Ind AS 109.

  1. AThe investment is remeasured to the lower of carrying amount and fair value less costs to sell under Ind AS 105
  2. BThe investment is reclassified to cost and then measured under Ind AS 105
  3. CThe measurement of the investment under Ind AS 109 is not changed by the held for sale classificationCorrect
  4. DThe investment must be derecognised and shown as a disposal group at its original cost

Explanation

Ind AS 27 states that the measurement of investments accounted for under Ind AS 109 is not changed when they are classified as held for sale. Option A would apply only to investments held at cost.

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