Difference Wiki

IAS 27 vs. IFRS 10: What's the Difference?

Edited by Huma Saeed || By Sawaira Riaz || Published on February 11, 2024
IAS 27 focuses on separate financial statements. IFRS 10 addresses consolidated financial statements.

Key Differences

IAS 27, titled "Separate Financial Statements," guides the accounting and disclosure requirements for an entity's separate financial statements. Conversely, IFRS 10, named "Consolidated Financial Statements," focuses on the preparation and presentation of consolidated financial statements, detailing how to account for controlled entities.
Sawaira Riaz
Feb 11, 2024
IAS 27 is applied when an entity prepares separate financial statements that present investments in subsidiaries, joint ventures, and associates. In contrast, IFRS 10 is utilized when determining whether control exists in a parent-subsidiary relationship, guiding the consolidation process.
Sawaira Riaz
Feb 11, 2024
Under IAS 27, entities have the option to account for investments in subsidiaries, joint ventures, and associates either at cost or in accordance with IFRS 9. IFRS 10, however, requires entities to consolidate all subsidiaries and provides guidance on how to apply the control principle.
Sawaira Riaz
Feb 11, 2024
IAS 27 requires disclosures about investments in subsidiaries, associates, and joint ventures, along with any separate financial statements presented. IFRS 10 mandates disclosures that enable users to evaluate the nature of, and risks associated with, an entity's interests in other entities and the effects of those interests on its financial position.
Aimie Carlson
Feb 11, 2024
The key aspect of IAS 27 is its focus on the financial statements of the parent company alone, not including its subsidiaries. On the other hand, IFRS 10 mandates a group perspective, considering the economic entity as a whole, including all subsidiaries.
Janet White
Feb 11, 2024
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Comparison Chart

Scope

Separate financial statements
Consolidated financial statements
Sawaira Riaz
Feb 11, 2024

Focus

Investments in subsidiaries, joint ventures
Control over subsidiaries
Huma Saeed
Feb 11, 2024

Accounting for Investments

At cost or in accordance with IFRS 9
Consolidation required
Sawaira Riaz
Feb 11, 2024

Required Disclosures

Information about investments in other entities
Nature and risks of interests in other entities
Harlon Moss
Feb 11, 2024

Perspective

Parent company alone
Economic entity as a whole
Harlon Moss
Feb 11, 2024
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IAS 27 and IFRS 10 Definitions

IAS 27

IAS 27 allows entities to prepare financial statements that are not consolidated.
Our separate financial statements, as per IAS 27, show investments in associates at fair value.
Sawaira Riaz
Jan 05, 2024

IFRS 10

IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements.
Under IFRS 10, we consolidate the financial statements of all our controlled entities.
Sawaira Riaz
Jan 05, 2024

IAS 27

IAS 27 pertains to the accounting for investments in subsidiaries, joint ventures, and associates in separate financial statements.
Under IAS 27, our company accounts for its investment in the subsidiary at cost.
Sawaira Riaz
Jan 05, 2024

IFRS 10

IFRS 10 requires disclosures about the nature of, and risks associated with, interests in other entities.
Our IFRS 10 disclosures include information on the risks involved with our interests in subsidiaries.
Harlon Moss
Jan 05, 2024

IAS 27

IAS 27 provides a choice between the cost model and the equity method for investments in subsidiaries, joint ventures, and associates.
According to IAS 27, we use the equity method for accounting our joint venture.
Sawaira Riaz
Jan 05, 2024

IFRS 10

IFRS 10 provides guidance on the accounting of subsidiaries, including potential voting rights and de facto control.
IFRS 10 directs us to consider potential voting rights when assessing control over an entity.
Sawaira Riaz
Jan 05, 2024

IAS 27

IAS 27 requires disclosures about investments and any separate financial statements presented.
IAS 27 mandates disclosure of our investment in the associate company in our separate financial statements.
Harlon Moss
Jan 05, 2024

IFRS 10

IFRS 10 defines control as the basis for consolidation and sets the criteria for determining control.
IFRS 10 requires us to assess control over our subsidiaries to determine consolidation requirements.
Huma Saeed
Jan 05, 2024

IAS 27

IAS 27 focuses on the financial statements of the parent company, excluding its subsidiaries.
IAS 27 guides us in preparing our parent company's financial statements, independent of our subsidiaries.
Harlon Moss
Jan 05, 2024

IFRS 10

IFRS 10 mandates consolidation of all entities that are controlled by a parent.
According to IFRS 10, our financial statements include the results of all subsidiaries we control.
Sawaira Riaz
Jan 05, 2024

FAQs

What is the main focus of IFRS 10?

IFRS 10 focuses on consolidated financial statements and the principle of control in determining whether consolidation is required.
Huma Saeed
Feb 11, 2024

Can an entity apply both IAS 27 and IFRS 10?

Yes, an entity can apply both, with IAS 27 for its separate financial statements and IFRS 10 for consolidated statements.
Janet White
Feb 11, 2024

What are the disclosure requirements under IAS 27?

IAS 27 requires disclosures about investments in other entities and any separate financial statements.
Janet White
Feb 11, 2024

What is IAS 27?

IAS 27 is a standard for accounting and disclosures in separate financial statements, focusing on investments in subsidiaries, joint ventures, and associates.
Sawaira Riaz
Feb 11, 2024

Does IFRS 10 mandate disclosures about control?

Yes, IFRS 10 mandates disclosures that enable evaluation of the nature of control over subsidiaries.
Sawaira Riaz
Feb 11, 2024

Does IAS 27 allow for fair value measurement of investments?

Yes, IAS 27 permits investments to be measured at fair value through profit or loss.
Sawaira Riaz
Feb 11, 2024

How does IAS 27 differ from IFRS 10 in terms of consolidation?

IAS 27 deals with separate financial statements without consolidation, while IFRS 10 requires consolidation of all controlled entities.
Sawaira Riaz
Feb 11, 2024

Can an entity under IFRS 10 avoid consolidating a subsidiary?

No, under IFRS 10, all controlled entities must be consolidated.
Janet White
Feb 11, 2024

How does IAS 27 address joint ventures?

IAS 27 allows entities to account for joint ventures either at cost or using the equity method.
Sawaira Riaz
Feb 11, 2024

What defines 'control' under IFRS 10?

Control under IFRS 10 is the power to govern the financial and operating policies of an entity to obtain benefits.
Aimie Carlson
Feb 11, 2024

Does IAS 27 apply to the preparation of consolidated financial statements?

No, IAS 27 applies to separate financial statements, not consolidated ones.
Harlon Moss
Feb 11, 2024

How does IAS 27 treat investments in subsidiaries?

IAS 27 allows accounting for such investments at cost or in accordance with IFRS 9.
Harlon Moss
Feb 11, 2024

How does IFRS 10 handle potential voting rights?

IFRS 10 considers potential voting rights when assessing control over an entity.
Janet White
Feb 11, 2024

Can a company have control without majority ownership under IFRS 10?

Yes, control can exist even without majority ownership if the entity has the power to govern the financial and operating policies.
Aimie Carlson
Feb 11, 2024

What is the key principle for consolidation in IFRS 10?

The key principle in IFRS 10 is control, determining whether an entity should be consolidated.
Sawaira Riaz
Feb 11, 2024

Are disclosures under IAS 27 and IFRS 10 similar?

No, IAS 27 focuses on disclosures in separate financial statements, while IFRS 10 requires disclosures on the nature and risks of control over other entities.
Sawaira Riaz
Feb 11, 2024

What are the main differences in the scope of IAS 27 and IFRS 10?

IAS 27 covers separate financial statements, while IFRS 10 is about consolidated financial statements.
Aimie Carlson
Feb 11, 2024

Are separate financial statements mandatory under IAS 27?

No, IAS 27 provides the option but does not mandate separate financial statements.
Aimie Carlson
Feb 11, 2024

Does IAS 27 require the equity method for subsidiaries?

IAS 27 offers a choice between the cost model and the equity method for subsidiaries.
Sawaira Riaz
Feb 11, 2024

Under IFRS 10, how is a subsidiary defined?

A subsidiary is an entity controlled by another entity, often called the parent.
Harlon Moss
Feb 11, 2024
About Author
Written by
Sawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Huma Saeed
Huma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.

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