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Module 36.2 - Separate Financial Statements

Separate financial statements are financial statements prepared by a parent or investor that account for investments in subsidiaries, joint ventures, and associates using either the cost method or in accordance with PFRS 9. When preparing separate financial statements, the parent or investor will account for investments using either the cost method or PFRS 9. Dividend income from investments is recognized when receivable, and investments classified as held for sale are measured under PFRS 5, except for those measured under PFRS 9.

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62 views1 page

Module 36.2 - Separate Financial Statements

Separate financial statements are financial statements prepared by a parent or investor that account for investments in subsidiaries, joint ventures, and associates using either the cost method or in accordance with PFRS 9. When preparing separate financial statements, the parent or investor will account for investments using either the cost method or PFRS 9. Dividend income from investments is recognized when receivable, and investments classified as held for sale are measured under PFRS 5, except for those measured under PFRS 9.

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Joshua Daarol
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Module 36.

2 - Separate Financial Statements (PAS 27)

Consolidated Financial Statements


These are financial statements which are prepared by combining the assets, liabilities, income, expenses
and the cash flows of the Parent and its Subsidiaries, and are presented as the financial statements of a single
economic entity.

Separate Financial Statements


These are which are prepared and presented by the Parent or an Investor, in which the investment in
subsidiary, joint venture & associate are accounted for at Cost or in accordance with PFRS 9.
a. Separate financial statements are those which are prepared in addition to consolidated financial
statements and the financial statements in which investment in associate or joint venture is accounted
for as per Equity Method under PAS 28.
b. The financial statements of the entity which has exemption from preparation of consolidated financial
statements for its subsidiaries and equity method for its associate holdings as per PFRS 10, are also
deemed as separate financial statements.
c. The financial statements which are prepared by the entity which does not have any investment in
subsidiary, joint venture or associate are not separate financial statements.

Preparation of Separate Financial Statements


When an entity prepares Separate Financial Statements, it will account for its investment in subsidiary,
joint venture or associate and any other ordinary investment either:
a. At Cost or
b. As per the PFRS 9 requirements.

Points to Be Considered
a. Any Dividend Income from investment in subsidiary, joint venture or associate and any other ordinary
investment will be recognized in the statement of profit or loss of the investor, when it becomes
receivable.
b. If the investment under Cost model is classified as held for sale, then it will be measured as per the
requirements of PFRS 5 Non-current Assets Held for Sale and Discontinued Operations. However, there
will be no impact upon the investments which are measured in accordance with PFRS 9 in such
circumstances.

Property of PREMIERE CPA Review and Professional Development Center – October 2020

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