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Parent Standalone FS

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Parent Standalone FS

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  • September 5, 2021 at 1:41 pm #634464
    parthbhanushali
    Member
    • Topics: 34
    • Replies: 20
    • ☆☆

    Hi Sir,

    Please let me know if following statement is correct:-

    The effect of investment in subsidiary on standalone FS of Parent co. will be as per equity method:-

    1) Profit/Loss share of Parent in the Profit/Loss of subsidiary = SOPL effect
    2) Investment in Subsidiary = SOFP effect

    September 5, 2021 at 5:22 pm #634483
    Kim Smith
    Keymaster
    • Topics: 130
    • Replies: 8137
    • ☆☆☆☆☆

    Yes, the equity method is an accounting option for investments in subsidiaries (as well as joint ventures and associates) in a parent’s separate financial statements. Subsidiaries may alternatively be carried at cost or at fair value in accordance with IFRS 9.

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