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Financial Reporting Standard 128

Separate Financial Statements

35.

An investment in an associate shall be accounted for in the investor's separate financial statements in accordance with paragraphs 37-42 of FRS 127.

36.

This Standard does not mandate which entities produce separate financial statements available for public use.

Disclosure

37.

The following disclosures shall be made:

(a)

the fair value of investments in associates for which there are published price quotations;

(b)

summarised financial information of associates, including the aggregated amounts of assets, liabilities, revenues and profit or loss;

(c)

the reasons why the presumption that an investor does not have significant influence is overcome if the investor holds, directly or indirectly through subsidiaries, less than 20 per cent of the voting or potential voting power of the investee but concludes that it has significant influence;

(d)

the reasons why the presumption that an investor has significant influence is overcome if the investor holds, directly or indirectly through subsidiaries, 20 per cent or more of the voting or potential voting power of the investee but concludes that it does not have significant influence;

(e)

the reporting date of the financial statements of an associate, when such financial statements are used in applying the equity method and are as of a reporting date or for a period that is different from that of the investor, and the reason for using a different reporting date or different period;

(f)

the nature and extent of any significant restrictions (eg resulting from borrowing arrangements or regulatory requirements) on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances;

(g)

the unrecognised share of losses of an associate, both for the period and cumulatively, if an investor has discontinued recognition of its share of losses of an associate;

(h)

the fact that an associate is not accounted for using the equity method in accordance with paragraph 13; and

(i)

summarised financial information of associates, either individually or in groups, that are not accounted for using the equity method, including the amounts of total assets, total liabilities, revenues and profit or loss.

38.

Investments in associates accounted for using the equity method shall be classified as non-current assets. The investor's share of the profit or loss of such associates, and the carrying amount of those investments, shall be separately disclosed. The investor's share of any discontinued operations of such associates shall also be separately disclosed.

39.

The investor's share of changes recognised directly in the associate's equity shall be recognised directly in equity by the investor and shall be disclosed in the statement of changes in equity as required by FRS 101 Presentation of Financial Statements.

40.

In accordance with FRS 1372004 Provisions, Contingent Liabilities and Contingent Assets, the investor shall disclose:

(a)

its share of the contingent liabilities of an associate incurred jointly with other investors; and

(b)

those contingent liabilities that arise because the investor is severally liable for all or part of the liabilities of the associate.

Effective Date

41.

An entity shall apply this Standard for annual periods beginning on or after 1 January 2006. Earlier application is encouraged. If an entity applies this Standard for a period beginning before 1 January 2006, it shall disclose that fact.

Withdrawal of Other Pronouncements

42.

This Standard supersedes FRS 1282004 Investments in Associates.

43.

This Standard supersedes the following Interpretations:

(a)

SIC-3 Elimination of Unrealised Profits and Losses on Transactions with Associates;

(b)

SIC-20 Equity Accounting Method - Recognition of Losses; and

(c)

SIC-33 Consolidation and Equity Method - Potential Voting Rights and Allocation of Ownership Interests.

  deleted


 

[Reason: MASB has not adopted SIC-3, SIC-20 and SIC-33.]

 

 

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