AS 23 - 438 Accounting Standard (AS) 23 (issued 2001)...

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438 Accounting Standard (AS) 23 (issued 2001) Accounting for Investments in Associates in Consolidated Financial Statements Contents OBJECTIVE SCOPE Paragraphs 1-2 DEFINITIONS 3-6 ACCOUNTING FOR INVESTMENTS EQUITY METHOD 7-9 APPLICATION OF THE EQUITY METHOD 10-20 CONTINGENCIES 21 DISCLOSURE 22-25 TRANSITIONAL PROVISIONS 26 The following Accounting Standards Interpretations (ASIs) relate to AS 23: ASI 8 - Interpretation of the term ‘Nea r Future ASI 16 - Treatment of Proposed Dividend under AS 23 ASI 17 - Adjustments to the Carrying Amount of Investment arising from Changes in Equity not Included in the Statement of Profit and Loss of the Associate ASI 18 - Consideration of Potential Equity Shares for Determining whether an Investee is an Associate under AS 23 The above Interpretations are published elsewhere in this Compendium.
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Accounting Standard (AS) 23 (issued 2001) Accounting forInvestments in Associates in Consolidated Financial Statements (This Accounting Standard includes paragraphs set in bold italic type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be read in the context of its objective and the Preface to the Statements of Accounting Standards 1 .) Accounting Standard (AS) 23, ‘Accountin g for Investments in Associates in Consolidated Financial Statements’ , issued by the Council of the Institute of Chartered Accountants of India, comes into effect in respect of accounting periods commencing on or after 1-4-2002. An enterprise that presents consolidated financial statements should accountfor investments in associates in the consolidated financial statements in accordance with this Standard. 2 The following is the text of the Accounting Standard. Objective The objective of this Statement is to set out principles and procedures for recognising, in the consolidated financial statements, the effects of the investments in associates on the financial position and operating results of a group. 1 Attention is specifically drawn to paragraph 4.3 of the Preface, according to which Accounting Standards are intended to apply only to items which are material. 2 It is clarified that AS 23 is mandatory if an enterprise presents consolidated financial statements. In other words, if an enterprise presents consolidated financial statements, it should account for investments in associates in the consolidated financial statements in accordance with AS 23 from the date of its coming into effect, i.e., 1-4-2002 (see ‘The Chartered Accountant’, July 2001, page 95). Reference may be made to the section titled ‘Announcement s of the Council regarding status of various documents issued by the Institute of Chartered Accountants of India’ appearing at the beginning of this Compendium for a detailed discussion on the implications of the mandatory status of an accounting standard.
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440 AS 23 (issued 2001) Scope 1. This Statement should be applied in accounting for investments in
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AS 23 - 438 Accounting Standard (AS) 23 (issued 2001)...

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