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

Kaveri Ltd holds a 28% associate and a 50% joint venture. Both investees use a different inventory cost formula from Kaveri's for like transactions. Kaveri can obtain the associate's information but cannot practicably get the associate to restate. Which statement is correct under Ind AS 28 (paragraph 35)?

Ind AS 28 requires uniform accounting policies for like transactions and events. For an associate, the investor may skip adjustments only when it is impracticable, because it lacks control to make the associate follow its policies. For a joint venture, no such relief exists, so adjustments are required.

  1. AUniform policies are required for both the associate and the joint venture, with no exception
  2. BUniform policies are not required for either investee because Kaveri has no control
  3. CUniform policies are required for the joint venture; for the associate they are required unless it is impracticableCorrect
  4. DUniform policies are required for the associate; for the joint venture they are required unless it is impracticable

Explanation

Paragraph 35 of Ind AS 28 requires uniform accounting policies for like transactions, unless it is impracticable in the case of an associate. IAS 28 has no such relief, and the Ind AS relief reflects that an investor lacks control over an associate. The relief does not extend to a joint venture, so the last option reverses the rule.

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