This briefing document summarizes the main themes and important ideas from the provided sources regarding International Accounting Standard (IAS) 27, “Separate Financial Statements.” The sources include the standard itself, interpretations, basis for conclusions, discussion papers, fact sheets, and case studies related to IAS 27 and its interaction with other accounting standards.

1. Objective and Scope of IAS 27:

• Primary Objective: The core objective of IAS 27 is to “prescribe the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.” (IAS 27 – Separate Financial Statements.pdf, IAS 27, ias27_en.pdf, IAS 27)
• Scope: IAS 27 applies when an entity “elects, or is required by local regulations, to present separate financial statements.” (IAS 27 – Separate Financial Statements.pdf, IAS 27, ias27_en.pdf, IAS 27, hkas27_2011.pdf)
• The standard focuses on accounting for investments in subsidiaries, joint ventures, and associates in these separate financial statements. (IAS 27 – Separate Financial Statements.pdf, IAS 27, gtal_2016_factsheet-ias27-separate-financial-statements.pdf)

2. Preparation of Separate Financial Statements:

• Accounting for Investments: When preparing separate financial statements, an entity shall account for investments in subsidiaries, joint ventures, and associates at:
• Cost
• Fair Value (in accordance with NZ IFRS 9 or IAS 39)
• Using the Equity Method (though financial statements where equity method is used are not considered separate financial statements under the strict definition of IAS 27). (NEW SOURCE: Excerpts from “IAS 27 – Separate Financial Statements.pdf”, gtal_2016_factsheet-ias27-separate-financial-statements.pdf, NEW SOURCE: Excerpts from “PASSFR_Case_E-book.pdf”, Separate_financial_statements_-_Discussion_Paper.pdf)
• Consistency in Accounting Methods: The entity is required to apply the same accounting method for each category of investments (subsidiaries, joint ventures, and associates). (NEW SOURCE: Excerpts from “PASSFR_Case_E-book.pdf”)
• Non-Mandatory Preparation: NZ IAS 27 “does not mandate which entities produce separate financial statements.” (NEW SOURCE: Excerpts from “2024-NZ-IAS-27.pdf”) The decision to prepare them is often based on election or local regulatory requirements. (IAS 27 – Separate Financial Statements.pdf, IAS 27, Separate_financial_statements_-_Discussion_Paper.pdf)
• Investment Entities: An investment entity that applies the exception to consolidation for all of its subsidiaries presents separate financial statements as its only financial statements. (Separate_financial_statements_-_Discussion_Paper.pdf, gtal_2016_factsheet-ias27-separate-financial-statements.pdf)

3. Disclosure Requirements in Separate Financial Statements:

• When a parent or investor with joint control or significant influence prepares separate financial statements, they shall disclose:
• The fact that the statements are separate financial statements and the reasons for their preparation if not legally required. (IAS 27 – Separate Financial Statements.pdf, IAS 27, ias27_en.pdf, gtal_2016_factsheet-ias27-separate-financial-statements.pdf)
• “a list of significant investments in subsidiaries, joint ventures and associates, including: (i) the name of those investees; (ii) the principal place of business (and country of incorporation, if different) of those investees; (iii) its proportion of the ownership interest (and its proportion of the voting rights, if different) held in those investees.” (IAS 27 – Separate Financial Statements.pdf, IAS 27, ias27_en.pdf, gtal_2016_factsheet-ias27-separate-financial-statements.pdf)
• A description of the method used to account for these investments. (IAS 27, gtal_2016_factsheet-ias27-separate-financial-statements.pdf, NEW SOURCE: Excerpts from “2024-NZ-IAS-27.pdf”)
• The parent or investor shall also “identify the financial statements prepared in accordance with IFRS 10, IFRS 11 or IAS 28 (as amended in 2011) to which they relate.” (IAS 27 – Separate Financial Statements.pdf, IAS 27, gtal_2016_factsheet-ias27-separate-financial-statements.pdf)
• Investment entities preparing separate financial statements as their only statements must also present the disclosures related to investment entities as required by IFRS 12. (gtal_2016_factsheet-ias27-separate-financial-statements.pdf)

4. Relationship with Other IFRS Standards:

• NZ IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations) and NZ IFRS 9 (Financial Instruments): Investments classified as held for sale or for distribution are accounted for according to these standards if previously at cost or fair value, respectively. (NEW SOURCE: Excerpts from “2024-NZ-IAS-27.pdf”)
• NZ IFRS 10 (Consolidated Financial Statements), NZ IFRS 11 (Joint Arrangements), and NZ IAS 28 (Investments in Associates and Joint Ventures): These standards provide definitions for key terms like subsidiaries, control, joint control, joint ventures, associates, and significant influence, which are relevant to IAS 27. (NEW SOURCE: Excerpts from “2024-NZ-IAS-27.pdf”, IAS 27 – Separate Financial Statements.pdf)
• Separate financial statements are 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… are required by IAS 28 to be accounted for using the equity method…” (ias-27-separate-financial-statements.pdf)
• When preparing separate financial statements, entities must comply with “all applicable IFRS,” not just IAS 27. This includes standards like IAS 1, IAS 18 (Revenue), IFRS 11, and IFRS 3 (Business Combinations), where relevant and not in conflict with IAS 27’s guidance on investments. (Separate_financial_statements_-_Discussion_Paper.pdf)

5. Purpose and Use of Separate Financial Statements:

• Separate financial statements are considered useful to a wide range of users, including “equity investors, debt providers, employees, other creditors, prudential and market regulators, tax authorities and customers, in making economic decisions about any kind of interest that a user has or will have in the single entity.” (Separate_financial_statements_-_Discussion_Paper.pdf)
• These decisions may involve evaluating dividend flows, assessing creditworthiness, understanding compliance with regulations, and assessing management stewardship. (Separate_financial_statements_-_Discussion_Paper.pdf)
• The relevance of separate financial statements can be higher when they have a legal role in addition to an informative one, such as when used for determining distributable dividends or in legal disputes based on local regulations. (Separate_financial_statements_-_Discussion_Paper.pdf, A4.13 Finally, our research also showed that the financial statements of an entity within a group were important if they had a legal role. This can be explained by the fact that the amount of dividends allowed to be distributed to shareholders is determined on the basis of the approved and audited financial statements that comply with local regulations.)

6. Key Considerations and Interpretations:

• Dividends Received: Dividends received from subsidiaries, joint ventures, and associates are recognized in profit or loss if the investment is at cost or fair value, but as a reduction in the carrying amount of the investment if the equity method is used. (NEW SOURCE: Excerpts from “2024-NZ-IAS-27.pdf”)
• Common Control Transactions: A discussion paper highlights the complexities in accounting for business combinations under common control in separate financial statements. (Separate_financial_statements_-_Discussion_Paper.pdf)
• Terminology Clarification: There has been discussion about clarifying the terminology used in IFRS regarding “separate financial statements” versus “individual financial statements” to avoid inconsistencies in practice. (Separate_financial_statements_-_Discussion_Paper.pdf)
• Consolidation vs. Separate Statements: IAS 27 specifies the circumstances under which consolidated financial statements are prepared by a parent for the group it controls, and when separate financial statements are presented by a parent, investor, or venturer. (NEW SOURCE: Excerpts from “MPRA_paper_35551.pdf”)

7. Historical Context and Amendments:

• IAS 27 has been revised and reissued over time. The version effective for annual periods beginning on or after January 1, 2013, had a modified title: “Separate Financial Statements.” (gtal_2016_factsheet-ias27-separate-financial-statements.pdf, hkas27_2011.pdf)
• Amendments have been made to IAS 27 related to the measurement of investments held for sale under IFRS 5 and the accounting for investment entities. (NEW SOURCE: Excerpts from “MPRA_paper_35551.pdf”, IAS 27)
• The issuance of IFRS 10 superseded the previous version of IAS 27 concerning consolidated and separate financial statements (as amended in 2008). (ias-27-separate-financial-statements.pdf, ias27_en.pdf)

8. Examples and Case Studies:

• The provided “PASSFR_Case_E-book.pdf” includes a case study specifically on IAS 27, illustrating its application in accounting for investments in subsidiaries, joint ventures, and associates in separate financial statements, including the choice of accounting methods. (NEW SOURCE: Excerpts from “PASSFR_Case_E-book.pdf”)

This briefing document provides a comprehensive overview of the key aspects of IAS 27 based on the provided sources. It highlights the standard’s objective, scope, preparation guidelines, disclosure requirements, its interaction with other IFRS standards, the purpose of separate financial statements, and some important considerations and historical context. Remember that accounting standards are subject to change, and it’s crucial to refer to the latest official pronouncements for specific application.convert_to_textConvert to sourceNotebookLM can be inaccurate; please double check its responses.