IAS 27

Separate Financial Statements

1Objective and scope

IAS 27 applies when an entity elects, or is required by local regulation, to present separate financial statements - additional financial statements presented by a parent (or an investor with joint control of, or significant influence over, an investee) alongside its consolidated financial statements (IFRS 10) or its equity-accounted financial statements (IAS 28).

2Key definitions

3Accounting for the investments

Separate financial statements are prepared IN ADDITION to consolidated financial statements, never as a substitute for them (an entity that has no subsidiaries, joint ventures or associates does not present separate financial statements at all - its only financial statements ARE its own). In separate financial statements, an entity accounts for investments in subsidiaries, joint ventures and associates using one of three methods:

• At cost
• In accordance with IFRS 9 (generally fair value through profit or loss, or through OCI if elected for equity instruments)
• Using the equity method as described in IAS 28

The same method is applied to every investment within each category (subsidiaries, joint ventures, associates), though a different method may be chosen for each category. Dividends from a subsidiary, joint venture or associate are recognised in profit or loss in the separate financial statements when the entity's right to receive the dividend is established.

4Presentation and disclosure

• The fact that the statements are separate financial statements, and the reason they are prepared if not required by law
• A list of significant investments in subsidiaries, joint ventures and associates, including name, principal place of business, and proportion of ownership interest
• A description of the method used to account for each category of investment

5Examinable focus