Skip to content

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

Lakshya Holdings Ltd elects Ind AS 109 for investments in subsidiaries in its SFS, so they are held at fair value. One such investment, Orion Tech Ltd, becomes held for sale at year end. Carrying amount (fair value) is ₹50 crore; fair value less costs to sell is ₹48 crore. What is the SFS treatment?

The investment stays at ₹50 crore. For investments accounted for under Ind AS 109, classification as held for sale does not change their measurement; only investments carried at cost are accounted for under Ind AS 105.

  1. AWrite down to ₹48 crore through profit or loss under Ind AS 105
  2. BWrite down to ₹48 crore through other comprehensive income
  3. CRetain ₹50 crore, as measurement under Ind AS 109 is not changedCorrect
  4. DTransfer to cost basis at ₹50 crore and then apply Ind AS 105

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. Only cost-based investments move to Ind AS 105 measurement. So the ₹2 crore write-down in option A is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 27 Separate Financial Statements shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 27 Separate Financial StatementsFree diagnostic mock

More Ind AS 27 Separate Financial Statements questions