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A wholly-owned subsidiary holds investments in associates. The subsidiary's ultimate parent prepares consolidated financial statements compliant with Ind AS that are publicly available; the subsidiary's debt/equity is NOT publicly traded; the owners are informed and do not object. Identify the consequence under Ind AS 28.
AThe exemption is available only if the subsidiary is loss-making
BThe subsidiary must measure the associate at fair value under Ind AS 109
CThe subsidiary must still apply the equity method in its consolidated FS
DThe subsidiary may avail the exemption from applying the equity method (paragraph 17 conditions met)
Answer & Solution
Correct answer: D. The subsidiary may avail the exemption from applying the equity method (paragraph 17 conditions met)
Paragraph 17 of Ind AS 28 mirrors paragraph 4(a) of Ind AS 110. Where the subsidiary is itself exempt from preparing consolidated FS (or the four conditions are met — non-objecting owners + Ind AS-compliant publicly available consolidated FS at parent level + not publicly traded + not in process of public listing), it need not apply the equity method.
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