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Editorial Board on Accounts and Audit
  • Investment in Subsidiaries

    by Kamal on Thursday, March 21, 2019 at 11:50 AM

    Can the equity investment in 100% subsidiary 'A' be classified as FVOCI and another 100% subsidiary 'B' be classified at Cost

    Replied byEditorial Board Tuesday, March 26, 2019 at 07:16 PM

    No, valuing one subsidiary at FVOCI and another at cost shall tantamount to using different accounting policies for measurement of investment in subsidiary which is not allowed as per Ind AS 27. Investment in subsidiaries is classified as one category of investment. AS per Ind AS 27 Separate Financial Statements, the entity in its separate financial statements shall measure its investment in subsidiary either at cost or in accordance with Ind AS 109. Further, Ind AS 27 also requires that same accounting policy should be used for each category of investment. Measuring one subsidiary at cost and other at FVOCI would be construed as using different accounting policy for one category of investment.

    Accordingly, such accounting would not be in accordance with Ind AS 27.

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