Separate financial statements
IAS 27 sets requirements for accounting for investments in subsidiaries, joint ventures and associates in separate financial statements, subject to permitted policy choices and the relevant standard’s conditions. They are not the same as consolidated financial statements, which present parent and subsidiaries as a single economic entity. Determine which statements the question asks for.
Worked example
A parent holds a subsidiary at cost in its separate financial statements under its chosen IAS 27 policy. In its consolidated statements it combines subsidiary assets and liabilities and eliminates the parent’s investment.
Common mistake
Applying consolidation adjustments to the parent’s separate investment balance, or assuming the separate statements use the same measurement as the group statements.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |