Ind AS 28
Active
Investments in Associates and Joint Ventures
Prescribes the equity method of accounting for investments in associates and joint ventures and the significant influence test, converged almost exactly with IAS 28.
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Conceptual Framework Linkage
Identical equity method philosophy to IAS 28
Ind AS 28 applies the IDENTICAL principle as IAS 28 – investments in associates (SIGNIFICANT INFLUENCE, not control) and joint ventures (JOINT CONTROL, classified as a JV under Ind AS 111) are accounted for using the EQUITY METHOD, recognising the investor's SHARE of the investee's profit/loss.
HOW IND AS 28 MAPS TO THE FRAMEWORK
Faithful representation – the equity method reflects the investor's economic interest in the investee's net assets/performance more faithfully than a simple cost-based approach – identical to IAS 28Widespread Indian application – Indian business groups (conglomerates) and infrastructure companies FREQUENTLY hold associate/JV stakes as part of their corporate structuring, making Ind AS 28's equity method GENUINELY significant in Indian practice
Ind AS 28 introduced NO substantive change to the equity method relative to IAS 28 – its Indian relevance is most pronounced for the SCALE and FREQUENCY of associate/JV holdings among Indian business groups.
The significant influence presumption – identical to IAS 28
Holding ≥ 20% of voting power = REBUTTABLE presumption of significant influence
IDENTICAL threshold and rebuttable nature to IAS 28.
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Scope & Applicability
What Ind AS 28 covers
Ind AS 28 applies to accounting for investments in associates and joint ventures, and prescribes the equity method's application – IDENTICAL scope to IAS 28.
Key definitions you must know
Significant influence
IDENTICAL definition to IAS 28 – the power to participate in financial/operating policy decisions, without control or joint control.
Equity method
IDENTICAL definition to IAS 28 – initial recognition at cost, adjusted for the investor's post-acquisition share of the investee's profit/loss and OCI.
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Significant Influence – The 20% Threshold (with worked example)
Identical rebuttable presumption to IAS 28
Example 1: Significant influence despite a sub-20% holding
An Indian company holds only 15% of an investee's voting shares but has a contractual right to appoint ONE director to the investee's board and participates in key policy-making decisions.
Despite the SUB-20% holding, significant influence likely EXISTS due to board representation and participation in policy decisions – an IDENTICAL rebuttable presumption analysis to how IAS 28 would assess the same fact pattern globally.
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The Equity Method – Initial & Subsequent Measurement
Identical mechanics to IAS 28
Initial recognition at cost; subsequently ADJUSTED for the investor's share of profit/loss (through P&L) and OCI (through OCI), with dividends received REDUCING the carrying amount – IDENTICAL to IAS 28.
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Losses Exceeding the Investment
Identical to IAS 28
Once the investment's carrying amount reaches ZERO, further losses are recognised ONLY to the extent the investor has incurred legal/constructive obligations or made payments on the investee's behalf – IDENTICAL to IAS 28.
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Impairment of Equity-Accounted Investments
Identical to IAS 28
The ENTIRE carrying amount of the investment (not underlying assets separately) is tested for impairment under Ind AS 36's recoverable amount framework when indicators exist – IDENTICAL to IAS 28.
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Indian Conglomerate & Infrastructure JV Context
A practically prominent Indian application area
Large Indian business groups frequently structure cross-holdings, strategic partnerships, and infrastructure/manufacturing joint ventures involving SIGNIFICANT INFLUENCE (rather than control) stakes – making Ind AS 28's equity method GENUINELY significant across sectors including telecom, cement, automotive, and financial services, where minority strategic stakes and joint venture structures (often with foreign partners) are common.
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Discontinuing the Equity Method
Identical to IAS 28
The equity method ceases from the date significant influence/joint control is LOST, with the RETAINED interest remeasured at fair value – IDENTICAL to IAS 28.
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Disclosure Requirements
Identical disclosure requirements to IAS 28
Nature/extent of significant restrictions on transferring fundsUnrecognised share of losses of an associate/JVSummarised financial information (cross-referenced from Ind AS 112)
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Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
Whether significant influence exists at sub-20% holdings, or is rebutted above 20%Whether losses continue to be recognised once the investment reaches zero
SIGNIFICANT ESTIMATES
Recoverable amount for impairment testingFair value of a retained interest on loss of significant influence
Indian conglomerate cross-holding structures sometimes require careful analysis of AGGREGATE influence (direct plus indirect through other group entities) to correctly determine significant influence.
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Ind AS 28 vs IAS 28 – Full Comparison
Comprehensive comparison table
FeatureIAS 28Ind AS 28
Equity method mechanics, significant influence thresholdStandard modelIDENTICAL – no substantive divergence
Practical application contextVaries by jurisdictionEspecially prominent given widespread Indian conglomerate cross-holdings and infrastructure JV structures
Ind AS 28 is essentially IDENTICAL to IAS 28 in substance – its distinctive Indian relevance lies in the SCALE and FREQUENCY of associate/JV structures among Indian business groups, not any accounting divergence.
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Statement Mapping
Comprehensive event-to-statement mapping table
Event / transactionStatement(s) affectedNotes
Share of associate/JV profit or lossP&LIdentical to IAS 28
Share of associate/JV OCIOCIIdentical to IAS 28
Carrying amount of the investmentBalance SheetSingle-line equity-accounted presentation
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Related Standards
Cross-reference map
StandardConnection
IAS 28The global counterpart standard, near-identically converged
Ind AS 111Determines whether a joint arrangement qualifies as a JV subject to Ind AS 28's equity method
Ind AS 36Governs impairment testing of the equity-accounted investment's carrying amount
Quick-reference glossary
Significant influence
Power to participate in financial/operating policy decisions without control – identical to IAS 28.
Rebuttable presumption
The 20% voting power threshold creates a presumption of significant influence that can be overcome with clear contrary evidence.
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Quick-Reference Glossary
Significant influence
The power to participate in financial/operating policy decisions without control or joint control – identical to IAS 28.
Equity method
Initial recognition at cost, adjusted for the investor's post-acquisition share of the investee's profit/loss and OCI – identical to IAS 28.
Rebuttable presumption
The 20% voting power threshold creates a presumption of significant influence that can be overcome with clear contrary evidence.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows