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Group accounts · IAS 27

IAS 27 Separate Financial Statements

Summary, key points, exam traps — written for ICAP, ACCA, ICAI, CIMA and ICAEW students.

On this page
  1. Objective
  2. Scope
  3. Key definitions
  4. Recognition & measurement
  5. Key disclosures
  6. Common exam traps
  7. Related standards
  8. Practise MCQs

Objective

Sets out how to account for investments in subsidiaries, joint ventures and associates when an entity prepares separate (single-entity) financial statements.

Scope

  • Separate financial statements that an entity chooses, or is required by local law, to present.
  • Does not say which entities must prepare separate statements, and does not cover consolidation (IFRS 10).

Key definitions

Separate financial statements
Statements presented by an entity in which it may account for investments in subsidiaries, joint ventures and associates at cost, under IFRS 9, or using the equity method.

Recognition & measurement

Measurement

  • Account for each category of investment at cost, in accordance with IFRS 9, or using the equity method (IAS 28), applied consistently to each category.
  • Investments classified as held for sale follow IFRS 5 (when measured at cost).
  • Dividends from a subsidiary, joint venture or associate are recognised in profit or loss when the right to receive them is established (unless the equity method is used, when they reduce the investment).
  • Certain group reorganisations that set up a new parent may allow the new parent to measure cost at its share of the original parent's equity.

Key disclosures

  • The fact that the statements are separate statements and the reason they are prepared, if not required by law.
  • A list of significant investees: name, principal place of business, ownership interest and method used.
  • If consolidated statements are not prepared because of the exemption, details of the parent whose consolidated statements are publicly available.

Common exam traps

  • IAS 27 is about the parent's own accounts — not consolidation.
  • The equity method is allowed in separate statements as an accounting policy choice.

Practise MCQs on this standard

Test your understanding of IAS 27 with free chapter-wise MCQs and explanations in these question banks.

CAF-6 Corporate ReportingICAP CAFACCA FR Financial ReportingACCACA Inter P1 Advanced AccountingICAI CA Intermediate

ICAI CA Intermediate examines Indian Accounting Standards, which are based on but can differ from IFRS. Check your syllabus.

Read the official IAS 27 text on ifrs.org