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

Himalaya Ltd uses the equity method for its investments in Beas Ltd (an associate) and Chenab LLP (a joint venture). Both investees follow accounting policies different from Himalaya's for similar transactions. Which statement is consistent with Ind AS 28 as notified in India, which differs from IAS 28 on this point?

Ind AS 28 requires the entity's financial statements to use uniform accounting policies for like transactions and events in similar circumstances. The only relief is for an associate, where uniformity is not required if it is impracticable, because the investor lacks control. IAS 28 gives no such relief, and joint ventures are not covered.

  1. AUniform accounting policies are required for like transactions, but in the case of an associate this need not be followed where it is impracticable to do soCorrect
  2. BUniform accounting policies are required for the associate and the joint venture, with no exception of any kind
  3. CUniform accounting policies are never required because the investor does not control the investee
  4. DUniform accounting policies may be ignored for both the associate and the joint venture where it is impracticable to align them

Explanation

Para 35 of Ind AS 28 requires uniform accounting policies for like transactions and events in similar circumstances, unless, in the case of an associate, it is impracticable. The relief is given because the investor lacks control over an associate. IAS 28 does not provide this relief, and the relief is not extended to joint ventures, so options B, C and D are wrong.

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