Financial Accounting Financial Reporting FR

IAS 27 Separate Financial Statements

Spread the love

IAS 27, Separate Financial Statements, provides guidance on the preparation of separate financial statements for an entity that does not prepare consolidated financial statements. Separate financial statements present financial information about a parent company or an investor that holds investments in subsidiaries, associates, or joint ventures.

Here are some examples of how IAS 27 can be applied:

Example 1: Parent company preparing separate financial statements A parent company owns 100% of a subsidiary and prepares separate financial statements in addition to consolidated financial statements. The separate financial statements present financial information about the parent company only. The parent company’s assets, liabilities, income, and expenses are disclosed separately from those of the subsidiary. The separate financial statements also disclose the parent company’s investments in subsidiaries, associates, and joint ventures, as well as any dividends received from those investments.

Example 2: Investor preparing separate financial statements An investor holds investments in several associates and prepares separate financial statements in addition to consolidated financial statements. The separate financial statements present financial information about the investor only. The investor’s assets, liabilities, income, and expenses are disclosed separately from those of the associates. The separate financial statements also disclose the investor’s investments in associates and any dividends received from those investments.

Example 3: Joint venture preparing separate financial statements Two entities enter into a joint venture and prepare separate financial statements in addition to consolidated financial statements. The separate financial statements present financial information about the joint venture only. The joint venture’s assets, liabilities, income, and expenses are disclosed separately from those of the parent companies. The separate financial statements also disclose the joint venture’s investments in subsidiaries and associates, as well as any dividends received from those investments.

In each of these examples, IAS 27 requires the preparation of separate financial statements that present financial information about the relevant entity or entities. The separate financial statements must comply with the requirements of IFRS, including the recognition, measurement, presentation, and disclosure requirements.

Leave a Reply

Your email address will not be published. Required fields are marked *