[Checklist] for Disclosure Obligation under AS 23 | Accounting for Investments
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- Last Updated on 3 May, 2023
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The objective of AS 23, Accounting for Investments in Associates in Consolidated Financial Statements, 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. An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor. Significant influence is the power to participate in the financial and/ or operating policy decisions of the investee but not control over those policies. For the purpose of this Standard significant influence does not extend to the power to govern the financial and/or operating policies of an enterprise. As per the stipulation of this standard, an entity must comply with the below-mentioned disclosure requirements:
I. Has the entity disclosed the reasons for not applying the equity method in accounting for investments in associates when an investment in an associate has not been accounted for in consolidated financial statements under the equity method where permitted under AS 23?
II. Has the disclosure under the consolidated financial statements included a suitable list and explanation of associates, along with the percentage of ownership interest and, if applicable, the percentage of voting power held?
III. Have the consolidated financial statements disclosed the name(s) of the associate(s) whose reporting date(s) differ from that of the investor’s financial statements, along with the differences in reporting dates?
IV. If associates use accounting policies different from those adopted for similar transactions and events in similar circumstances in the consolidated financial statements, and it is impractical to make appropriate adjustments to their financial statements, has this fact been disclosed along with a brief description of the differences in accounting policies?
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