Difference between AS 21 and Ind AS 27

Open uri20170510 32134 1ue0f38?1494421710 rohit agarwal asked over 3 years ago

What is the Difference between AS 21 and Ind AS 27 Separate Financial Statements

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Picsjoin 2017224123730582 Archana answered over 3 years ago

Hie Rohit, **Difference between Ind AS 27 on Consolidated and Separate Financial Statements and existing AS 21, on Consolidated Financial Statements :-** 1. Ind AS 27 makes the preparation of Consolidated Financial Statements mandatory for a parent. Existing AS 21 does not mandate the preparation of Consolidated Financial Statements by a parent. As far as separate financial statements are concerned, as per existing AS 21, Consolidated Financial Statements are prepared in addition to separate financial statements. However, Ind AS 27 does not mandate preparation of separate financial statements. 2. Ind AS 27 provides guidance for accounting for investments in subsidiaries, jointly controlled entities and associates in preparing the separate financial statements. Existing AS 21 does not deal with the same. 3. As per existing AS 21, subsidiary is excluded from consolidation when control is intended to be temporary or when subsidiary operates under severe long term restrictions. Ind AS 27 does not give any such exemption from consolidation except that if a subsidiary meets the criteria to be classified as held for sale, in that case it shall be accounted for as per Ind AS 105, Noncurrent Assets held for Sale and Discontinued Operations. Existing AS 21 explains where an entity owns majority of voting power because of ownership and all the shares are held as stock in- trade, whether this amounts to temporary control. Existing AS 21 also explains the term ‘near future’. However, Ind AS 27 does not explain the same, as these are not relevant. 4. For considering share ownership, potential equity shares of the investee held by investor are not taken into account as per existing AS 21. However, as per Ind AS 27, existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether an entity has control over the subsidiary. 5. As per existing AS 21 minority interest should be presented in the consolidated balance sheet separately from liabilities and equity of the parent’s shareholders. However, as per Ind AS 27 non-controlling interests shall be presented in the consolidated balance sheet within equity separately from the parent shareholders’ equity.

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