Commonwealth legislation

AASB 127 - Separate Financial Statements - August 2015

In ForceCTH

Jurisdiction

Commonwealth

Collection

legislative instrument

Plain English Summary

6/10 complexity

What this legislation does

This standard (AASB 127) sets the rules for how Australian companies and organisations prepare separate financial statements — that is, financial reports for a parent company or investor on its own, without combining the results of its subsidiaries, joint ventures or associates.

Who it affects

Parent companies that choose (or are required) to report their own standalone financial position, rather than just group consolidated accounts
Investment entities (like investment funds) that are exempt from consolidating their subsidiaries
Not-for-profit organisations with investments in other entities
Companies undergoing reorganisations where a new parent company is created

Key requirements

When preparing separate financial statements, an entity must account for its investments in subsidiaries, joint ventures and associates using one of these three methods:

Cost — the original purchase price (with adjustments)
Fair value through profit or loss — market value with changes hitting the income statement (under AASB 9)
Equity method — recognising the investor's share of the investee's profits and losses (under AASB 128)

JSON API Accounting / audit standards

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Current sections

Direct links to the current provisions in AASB 127 - Separate Financial Statements - August 2015.

Official source available

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Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.