CA Inter P1 · Chapter 8 · Question 8 of 10
Case: Dhruv Ltd has an associate but no subsidiaries, and therefore does not prepare consolidated financial statements. In its separate financial statements, the investment in the associate should be accounted for:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) In accordance with AS 13, Accounting for Investments
Explanation
AS 23 requires the equity method only when the investor prepares consolidated financial statements. In separate financial statements, investments in associates are accounted for as per AS 13, i.e., long-term investments at cost less any other-than-temporary decline in value.
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