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

Zenith Ltd is a parent that must, under Ind AS 110, measure its investment in a subsidiary, Orbit Fund Ltd, at fair value through profit or loss under Ind AS 109. How should Zenith account for the Orbit investment in its separate financial statements?

Zenith must measure Orbit at fair value through profit or loss under Ind AS 109 in its separate financial statements as well. Ind AS 27 requires the same treatment as required in consolidated statements under Ind AS 110, so the cost option is not available.

  1. AAt cost, as separate financial statements permit a free choice
  2. BUnder the equity method
  3. CIn the same way, at fair value through profit or loss in accordance with Ind AS 109Correct
  4. DAt cost, with fair value changes disclosed only in notes

Explanation

Where a parent is required under Ind AS 110 to measure a subsidiary investment at fair value through profit or loss under Ind AS 109, Ind AS 27 requires the same accounting in its separate financial statements. The free cost choice does not apply here, and the equity method is not allowed in Ind AS 27.

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