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Ind as 28 - accounting for joint venture

Others 462 views 2 replies

Narayanan B

1 Points Posted on 19 March 2019

A company is transitioning from IGAAP to IND AS, Such Company has a joint venture, As per IGAAP the company was using proportionate method of consolidation. After the applicability of Ind AS a company can no longer use proportionate method of consolidation. Hence the same has to apply equity method of consolidation

Can Some one provide me a step by step process of transition from proportionate consolidation to the equity method in simple terms

Thanks in Advance

Replies (2)

Lisha Bansal

CA Finalist

2595 Points Posted on 19 March 2019

Yes, the company will have to reverse proportionate consolidation under IGAAP.

No line-by-line proportionate consolidation in the consolidated financial statements: Investment in Joint Venture will appear as a single line item at cost minus impairment loss and plus company's share in the profit or loss post acquisition.

No impact on company's standalone financial statements: Investment in Joint Venture will continue to be accounted at cost less impairment loss and it is fully impaired at standalone level.

Rishi Mehrotra

Articled Assistanr

31 Points Posted on 20 March 2019

in IndAS FS, present investment in JV less any impairment plus the share of profit, reverse all the line by line adjustments made to asset and liability as per IGAAP