Chapter 1: Introduction

IAS 27 is the main accounting standard that provides guidance on the preparation of IFRS separate financial statements. IAS 27 primarily focuses on the recognition and measurement of investments in subsidiaries, joint ventures and associates in separate financial statements. The standard also provides limited guidance on the presentation and preparation of separate financial statements.

The recognition and measurement requirements for investments in subsidiaries, joint ventures and associates in separate financial statements are set out in IAS 27. All other aspects of separate financial statements follow the preparation and presentation requirements of IAS 1 for general purpose financial statements and the measurement and disclosure provisions of all relevant IFRSs.

Definition

Separate financial statements – definition

Separate financial statements are those presented by an entity in which the entity can elect, subject to the requirements in IAS 27, to account for its investments in subsidiaries, joint ventures and associates either at cost, or in accordance with IFRS 9 (or, for entities that have not yet adopted IFRS 9, IAS 39), or using the equity method as described in IAS 28.

Separate financial statements are those presented in addition to consolidated financial statements or in addition to the financial statements of an investor that does not have investments in subsidiaries but has investments in associates or joint ventures in which the investments in associates or joint ventures are required by IAS 28 to be accounted for using the equity method, other than in the circumstances set out in IAS 27.

The financial statements of an entity that does not have a subsidiary, associate or joint venturer’s interest in a joint venture are not separate financial statements.

Separate financial statements for entities exempt from preparing consolidated financial statements

An entity that is exempted in accordance with IFRS 10 from preparing consolidated financial statements, or in accordance with IAS 28 from applying the equity method, may present separate financial statements as its only financial statements.

Separate financial statements for investment entities not consolidating any of their subsidiaries

An investment entity that is required, throughout the current period and all comparative periods presented, to apply the exception to consolidation for all of its subsidiaries in accordance with IFRS 10 presents separate financial statements as its only financial statements.