Skip to content

CA Intermediate · Advanced Accounting · AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

Vikram Ltd has an associate, Usha Ltd, whose financial statements are drawn up to 31 December 2025, while Vikram's consolidated statements are as at 31 March 2026. Under AS 23, which treatment is correct for using Usha's statements?

Vikram should use Usha's 31 December 2025 financial statements, adjusted for the effects of significant transactions or events occurring between that date and 31 March 2026. AS 23 allows different reporting dates with such adjustments, provided the gap is consistent from period to period.

  1. AUse Usha's 31 December statements, adjusted for significant transactions or events between the two datesCorrect
  2. BIgnore Usha's results until its year ends on 31 March
  3. CUse Usha's statements only if the gap is under one month
  4. DUse estimates of Usha's profit for the whole year without reference to its statements

Explanation

AS 23 permits use of the associate's statements made up to a different date, with adjustments for significant transactions or events between the dates. The difference between reporting dates should be the same from period to period. The other options are not provided in the Standard.

Did you get it right without looking?

One question tells you little. A timed set on AS 23 Accounting for Investments in Associates in Consolidated Financial Statements shows your real accuracy, how long you take and where you lose marks.

Practise AS 23 Accounting for Investments in Associates in Consolidated Financial StatementsFree diagnostic mock

More AS 23 Accounting for Investments in Associates in Consolidated Financial Statements questions