 PAS 27

Separate Financial Statements

Introduction

PAS 27 prescribes the accounting and disclosure requirements for investment in subsidiaries, associates
and joint ventures when an entity prepares separate financial statements.

PAS 27 does not mandate which entities should produce separate financial statements. PAS 27 is applied
when an entity chooses, or is required by law, to present separate financial statements that comply with
PFRSs.

Separate Financial Statements

Separate financial statements are those presented in addition to:

a. Consolidated financial statements; or

b. The financial statements of an entity with an investment in associate or joint venture that is
accounted for using equity method in accordance with PAS 28 Investment in Associates and Joint
Ventures.

The financial statements of an entity that does not have an investment in subsidiary, associate or joint
venturer are not separate financial statements.

Entities exempted from preparing consolidated financial statements present separate financial
statements as their only financial statements.

 Consolidated financial statements are “the financial statements of a group in which the assets,
liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are
presented as those of a single economic entity.”

Preparation of Separate Financial Statements

Separate financial statements are prepared in accordance with all applicable PFRSs, except that
investments in subsidiaries, associates or joint ventures are accounted for either:

a. At cost;

b. In accordance with PFRS 9 Financial Instruments, or

c. Using the equity method under PAS 28 Investments in Associates and Joint Ventures

The entity applies the same accounting for each investment category (i.e., subsidiaries, associates, and
joint ventures).

If the investments are measured at fair value through profit or loss in non-separate financial statements,
that same measurement is also used in the separate financial statements.
Investments classified for as held for sale are accounted for in accordance with PFRS 5 Non-current
Assets Held for Sale and Discontinued Operations.

Dividends

Dividends from a subsidiary, associate or joint venture are recognized in profit or loss when the entity’s
right to receive the dividends is established, except when the investment is accounted for using the
equity method, in which case the dividends are recognized as deduction to the carrying amount of the
investment.