Cost under IND AS 27
This query is : Resolved
Debasis Mukhopadhyay
(Querist)
21 November 2025
What is "cost" under IND AS 27 when Strategic Investments acquired in tranches are valued under it and diluted partially? Can we use simple average method for this purpose as the Standard is silent on FIFO/LIFO/WAM?
Dhirajlal Rambhia
(Expert)
21 November 2025
- Preferred practice : Most entities use Weighted Average Method (WAM) for cost allocation on dilution, as it better reflects the economics of tranche acquisitions.
- Simple Average Method: Permissible, but may be challenged by auditors/regulators if tranches were acquired at significantly different prices (since it could distort cost allocation).
- Best practice: Document rationale in accounting policy and ensure consistency.
- Simple Average Method: Permissible, but may be challenged by auditors/regulators if tranches were acquired at significantly different prices (since it could distort cost allocation).
- Best practice: Document rationale in accounting policy and ensure consistency.
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