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CA Final · Financial Reporting · Ind AS 28 Investments in Associates and Joint Ventures

Dhruv Ltd holds 35% of Eklavya Ltd, an associate. Eklavya values inventory using a method different from Dhruv's policy for similar transactions. Eklavya cannot practicably prepare additional financial statements on Dhruv's policies. Which statement reflects paragraph 35 of Ind AS 28?

Ind AS 28 paragraph 35 requires uniform accounting policies, but allows an exception for an associate where applying them is impracticable, because the investor has no control. Dhruv therefore need not align Eklavya's inventory method if it is impracticable to obtain the information.

  1. AUniform accounting policies are required, but for an associate this requirement need not be met if it is impracticableCorrect
  2. BUniform accounting policies are required in all cases, without exception, for associates
  3. CUniform policies are never needed because Dhruv does not control Eklavya
  4. DDhruv must adjust only the profit or loss, but not the carrying amount, to reflect uniform policies

Explanation

Paragraph 35 of Ind AS 28 requires uniform accounting policies unless, in the case of an associate, it is impracticable. This is because the investor lacks control and may not be able to make the associate prepare additional statements. The absolute-requirement option ignores the associate exception.

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