📖 Overview
This standard addresses accounting treatment for investments in subsidiaries, associates, and joint ventures in separate financial statements. An entity may account for investments at cost, under IFRS 9, or using the equity method.
🎯 Scope
This standard applies to separate financial statements of a parent entity, as well as financial statements of entities without subsidiaries or associates. It defines how to treat investments in subsidiaries, associates, and joint ventures in separate financial statements.
⚙️ Key Principles
1. **Separate Financial Statements**: Financial statements in which an entity presents its investments in subsidiaries, associates, and joint ventures either at cost, under IFRS 9, or using the equity method.
2. **Difference from Consolidated Statements**: Consolidated statements present the group as a single economic entity, while separate statements present only the parent entity.
📏 Measurement
**Measurement Options for Investments in Separate Statements:**
1. **Cost Model**: Investments measured at historical cost.
2. **Fair Value**: Under IFRS 9.
3. **Equity Method**: As required by IAS 28.
**Dividends:** Recognized as revenue when they become due, provided they are derived from post-acquisition profits.
✅ Recognition
Investments are recognized in separate financial statements when acquired.
Dividends received from subsidiaries, associates, and joint ventures are recognized as revenue in separate statements.
Investments measured at cost are tested for impairment under IAS 36.
📊 Presentation
**On the Statement of Financial Position:**
- Investments appear within non-current assets.
**On the Income Statement:**
- Dividends appear within other income.
- Impairment losses appear within other expenses.
**Disclosure:**
- The financial statements must be identified as separate.
- Reasons for preparing separate statements (if the entity is exempt from consolidation).
📝 Disclosure Requirements
Disclosures required:
- The financial statements are identified as separate.
- If the entity is exempt from preparing consolidated statements, reasons for exemption must be stated.
- Method of measuring investments (cost, fair value, equity method).
- List of significant subsidiaries and associates.
- Any restrictions on transferring funds from subsidiaries.
🔗 Related Standards
IFRS 10 (Consolidated Financial Statements), IAS 28 (Investments in Associates), IFRS 9 (Financial Instruments), IAS 36 (Impairment of Assets)