Home › CA Final › financialreporting › consolidation › Under Ind AS 110, an INVESTMENT ENTITY measures …
Under Ind AS 110, an INVESTMENT ENTITY measures most of its subsidiaries at:
AFAIR VALUE THROUGH PROFIT OR LOSS — not consolidating them, except for a subsidiary that provides services to the investment entity's own investment activities
BCost less impairment — consistent with traditional equity-method accounting
CEither consolidation or fair value at management's accounting-policy election
DAlways consolidated, with fair-value disclosed in the notes
Answer & Solution
Correct answer: A. FAIR VALUE THROUGH PROFIT OR LOSS — not consolidating them, except for a subsidiary that provides services to the investment entity's own investment activities
Para 31 — an investment entity MUST measure investment subsidiaries at FVTPL, NOT consolidate them. The only consolidated subsidiary is one that itself provides investment-related services to the investment entity (e.g., management services). This is a deliberate exception from the general consolidation requirement, reflecting that investment entities operate as fair-value-managed portfolios.
Related questions
An investor holds 30% of equity AND is also the asset manager of an investment vehicle. ThMr. X (an individual) holds 100% of Company A. Mr. X is not a corporate entity and does noUnder Ind AS 110, PROTECTIVE RIGHTS are:Under Ind AS 110, SUBSTANTIVE RIGHTS confer power if the holder has the PRACTICAL ABILITY A Ltd. is the asset manager of Fund X (a venture capital fund). A holds 10% of Fund X's unA Ltd. and B Ltd. set up C Ltd. to build and operate a toll road. A Ltd. constructs (2 yeaFive investors each own 20% of Entity Z and each has one seat on Z's seven-member board. SUnder Ind AS 110, an investor has POWER over an investee through: