IAS 27 Summary Notes

IAS 27 Separate Financial Statements

DEFINED TERMS

Consolidated Financial statements of a group in which the assets, liabilities, equity, income,
financial expenses and cash flows of the parent and its subsidiaries are presented as
statements those of a single economic entity.
Financial statements presented by a parent (i.e. an investor with control of a
Separate
subsidiary), an investor with joint control of, or significant influence over, an
financial
investee, in which the investments are accounted for at cost or in accordance
statements
with IFRS 9 Financial Instruments.

REQUIREMENT

IAS 27 does not mandate which entities produce separate financial

No mandate statements available for public use. It applies when an entity prepares
specified separate financial statements that comply with International Financial
Reporting Standards.
Financial statements in which the equity method is applied are not
Not to be considered
separate financial statements. Similarly, the financial statements of an
separate financial
entity that does not have a subsidiary, associate or joint venturer's
statements
interest in a joint venture are not separate financial statements.
An investment entity that is required, throughout the current period and
Investment entity not
all comparative periods presented, to apply the exception to
preparing
consolidation for all of its subsidiaries in accordance with
consolidated
of IFRS 10 Consolidated Financial Statements presents separate
financial statements
financial statements as its only financial statements.

CHOICE OF ACCOUNTING METHOD

When an entity prepares separate financial statements, investments in subsidiaries, associates,

and jointly controlled entities are accounted for either:
Cost at cost, or
Fair value in accordance with IFRS 9 Financial Instruments, or
Equity using the equity method as described in IAS 28 Investments in Associates and
method Joint Ventures.
The entity applies the same accounting for each category of investments.

ACCOUNTING FOR DIVIDENDS

An entity recognises a dividend from a subsidiary, joint venture or associate in
Normal profit or loss in its separate financial statements when its right to receive the
dividend in established.
Accounting for dividends where the equity method is applied to investments in
Under equity
joint ventures and associates is specified in IAS 28 Investments in Associates
method
and Joint Ventures.

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IAS 27 Summary Notes

IMPACT OF OTHER STANDARDS

Investments that are accounted for at cost and classified as held for sale in
accordance with IFRS 5 are accounted for in accordance with that IFRS.
Investments carried at cost should be measured at the lower of their
IFRS 5
carrying amount and fair value less costs to sell. The measurement of
investments accounted for in accordance with IFRS 9 is not changed in
such circumstances.
If an entity elects, in accordance with IAS 28, to measure its investments in
associates or joint ventures at FVTPL in accordance with IFRS 9, it shall
IAS 28
also account for those investments in the same way in its separate
financial statements.
If a parent investment entity is required, in accordance with IFRS 10, to
IFRS 10 (Parent measure its investment in a subsidiary at FVTPL in accordance with IFRS
investment entity) 9, it is required to also account for its investment in a subsidiary in the
same way in its separate financial statements.
When a parent ceases to be an investment entity, the entity can account
IFRS 10 (Becoming for an investment in a subsidiary at cost (based on fair value at the date of
or ceasing to be change or status) or in accordance with IFRS 9.
investment entity) When an entity becomes an investment entity, it accounts for an
investment in a subsidiary at FVTPL in accordance with IFRS 9.

GROUP REORGANISATIONS

Specified accounting applies in separate financial statements when a parent

reorganises the structure of its group by establishing a new entity as its parent in
a manner satisfying the following criteria:
 the new parent obtains control of the original parent by issuing equity
instruments in exchange for existing equity instruments of the original
Criteria parent
 the assets and liabilities of the new group and the original group are the
same immediately before and after the reorganisation, and
 the owners of the original parent before the reorganisation have the same
absolute and relative interests in the net assets of the original group and
the new group immediately before and after the reorganisation.
Where these criteria are met, and the new parent accounts for its investment in
the original parent at cost, the new parent measures the carrying amount of its
Measurement
share of the equity items shown in the separate financial statements of the
original parent at the date of the reorganisation.
The above requirements:
 apply to the establishment of an intermediate parent within a group, as
well as establishment of a new ultimate parent of a group
Application  apply to an entity that is not a parent entity and establishes a parent in a
manner that satisfies the above criteria
 apply only where the criteria above are satisfied and do not apply to other
types of reorganisations or for common control transactions more broadly.

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IAS 27 Summary Notes

GROUP REORGANISATIONS

When a parent, in accordance with paragraph 4(a) of IFRS 10, elects

not to prepare consolidated financial statements and instead prepares
separate financial statements, it shall disclose in those separate
financial statements:
 the fact that the financial statements are separate financial
statements; that the exemption from consolidation has been
used; the name and principal place of business (and country of
Parent not preparing
incorporation if different) of the entity whose consolidated
consolidated
financial statements that comply with IFRS have been produced
financial statements
for public use; and the address where those consolidated
(IFRS 10.4(a))
financial statements are obtainable,
 a list of significant investments in subsidiaries, jointly controlled
entities, and associates, including the name, principal place of
business (and country of incorporation if different), proportion of
ownership interest and, if different, proportion of voting rights, and
 a description of the method used to account for the foregoing
investments.
When an investment entity that is a parent prepares separate financial
statements as its only financial statements, it shall disclose that fact. The
Investment entity
investment entity shall also present the disclosures relating to
investment entities required by IFRS 12.
When a parent (other than a parent covered by the above
circumstances) or an investor with joint control of, or significant influence
over, an investee prepares separate financial statements, the parent or
investor shall identify the financial statements prepared in accordance
with IFRS 10, IFRS 11 or IAS 28 to which they relate. The parent or
investor shall also disclose in its separate financial statements:
 the fact that the statements are separate financial statements and
Other parents the reasons why those statements are prepared if not required by
law,
 a list of significant investments in subsidiaries, jointly controlled
entities, and associates, including the name, principal place of
business (and country of incorporation if different), proportion of
ownership interest and, if different, proportion of voting rights, and
 a description of the method used to account for the foregoing
investments.

Dated: 27 August 2016

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