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AS 23
ACCOUNTING FOR INVESTMENTS IN
ASSOCIATES IN CONSOLIDATED FINANCIAL STATEMENTS
Objective: The main
objective of this standard is to account and disclose the effect
of investments, in associates by companies, on financial
position and operating results of a group (a parent and all its subsidiaries).
Scope: This
standard is applicable for consolidated financial statements
only. It does not
apply when separate financial statements are prepared
by investors.
Definitions:
An
associate:
It is an enterprise in which the investor has significant
influence and which is neither a subsidiary nor a joint venture
of the investor.
Significant influence:
It is the power to participate in the financial and/or operating
policy decisions of the investee but not control over those
policies.
Control:
(a) The ownership, directly or indirectly through subsidiary/(ies),
of more than one-half of the voting power of an enterprise; or
(b) Control of the composition of the board of directors in the
case of a company or of the composition of the corresponding
governing body in case of any other enterprise so as to obtain
economic benefits from its activities.
A
subsidiary:
It is an enterprise that is controlled by another enterprise
A
parent:
It is an enterprise that has one or more subsidiaries.
Equity:
It is the residual interest in the assets of an enterprise after
deducting all its liabilities. |
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