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IAS 27 Separate Financial Statements

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Standard 2022 Issued
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IAS 27 prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity elects, or is required by local regulations, to present separate financial statements.

Separate financial statements are those presented in addition to consolidated financial statements.

Separate financial statements could be those of a parent or of a subsidiary by itself.  In separate financial statements, an investor accounts for investments in subsidiaries, joint ventures and associates either at cost, or in accordance with IFRS 9, or using the equity method as described in IAS 28.

Standard history

In April 2001 the International Accounting Standards Board (Board) adopted IAS 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries, which had originally been issued by the International Accounting Standards Committee in April 1989. That standard replaced IAS 3 Consolidated Financial Statements (issued in June 1976), except for those parts that dealt with accounting for investment in associates.

In December 2003 the Board issued a revised IAS 27 with a new title—Consolidated and Separate Financial Statements. This revised IAS 27 was part of the IASB’s initial agenda of technical projects. The revised IAS 27 also incorporated the guidance from two related Interpretations (SIC‑12 Consolidation—Special Purpose Entities and SIC‑33 Consolidation and Equity Method—Potential Voting Rights and Allocation of Ownership Interests).

The Board amended IAS 27 in January 2008 to address the accounting for non‑controlling interests and loss of control of a subsidiary as part of its business combinations project.

In May 2011 the Board issued a revised IAS 27 with a modified title—Separate Financial Statements. IFRS 10 Consolidated Financial Statements addresses the principle of control and the requirements relating to the preparation of consolidated financial statements.

In October 2012 IAS 27 was amended by Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). These amendments introduced new disclosure requirements for investment entities.

In August 2014 IAS 27 was amended by Equity Method in Separate Financial Statements (Amendments to IAS 27). These amendments allowed entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.