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

Veda Industries Ltd holds controlling stakes in two subsidiaries and significant influence in one associate. In preparing its separate financial statements under Ind AS 27, which of the following accounting policies is permitted?

Veda Industries may carry all its subsidiaries, joint ventures and associates at cost, or may apply Ind AS 109 to them. The equity method is not permitted in Ind AS 27 separate financial statements, so a mix using the equity method for the associate is not allowed.

  1. ACost for subsidiaries and the equity method for the associate
  2. BCost for all subsidiaries, joint ventures and associatesCorrect
  3. CEquity method for all subsidiaries, joint ventures and associates
  4. DFair value through OCI for subsidiaries and cost for the associate, chosen investment by investment

Explanation

Ind AS 27 permits investments in subsidiaries, joint ventures and associates to be accounted for at cost or in accordance with Ind AS 109, applying the same accounting to each category. The equity method, allowed in IAS 27, is not available in Ind AS 27. Option A is wrong because it uses the equity method.

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