Investment in Subsidiaries, Joint Ventures and Associates disclosed by Bharti Airtel Limited
<p> Ind AS 1 was amended with effect from 1 April 2023 to replace the requirement to disclose significant accounting policy with disclosure of material accounting policy information. The amendment also provided the principles for assessing whether an accounting policy is material accounting policy. This post compares the accounting policy on investment in subsidiaries, joint ventures and associates disclosed by Bharti Airtel Limited in the financial statements before and after the amendement.</p> <p> <strong>Investment in Subsidiaries, Associates and Joint Ventures disclosed by Bharti Airtel Limited in its Financial Statements for the year ended 31 March 2023:</strong></p> <p> The Company recognises its investment in subsidiaries, associates and joint ventures at cost less any impairment losses. The said investments are tested for impairment whenever circumstances indicate that their carrying values may exceed the recoverable amount (viz. higher of the fair value less costs to sell and the value in use).<br /> (Bharti Airtel Limited Financial Year Ended 31 March 2023)</p> <p> <strong>Analysis for Material Accounting Policy Information:</strong><br /> Primary condition – Accounting policy relates to material transaction, other event or condition:<br /> The company has presented investment in subsidiaries, associates and joint ventures as a separate line item in Balance Sheet. Accordingly, the primary condition is met.</p> <p> Secondary conditions – Any one of these need to be met:<br /> • The company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements – No. The company has not changed its policy on investment in subsidiaries, associates and joint ventures.<br /> • The company chose the accounting policy from one or more options permitted by Ind AS – Yes. The company has chosen to measure investment in subsidiaries at cost.<br /> • Accounting policy was developed in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors – No. Investment in subsidiaries in separate financial statements requires application of only Ind AS 27.<br /> • The accounting policy relates to an area for which an entity is required to make significant judgements or assumptions in applying an accounting policy, and the company discloses those judgements or assumptions in accordance with paragraph 122 and 125 of Ind AS 1. – Yes. The company has specified impairment reviews for investment in subsidiaries, joint ventures and associates in the note on key sources of estimation uncertainty.<br /> • The accounting is complex such that the company applies more than one Ind AS to a class of material transactions – No. The company has to apply only Ind AS 27 for investment in subsidiaries in separate financial statements.<br /> • The disclosure of accounting policy is required by a standard. – Yes. Ind AS 27 requires disclosure of the fact that the financial statements are separate financial statements and the method used to account for investment in subsidiaries, joint ventures and associates in separate financial statements.</p> <p> <strong>Conclusion:</strong><br /> As both the primary and secondary conditions are met, the company shall continue disclosure of the accounting policy on investment in subsidiaries, joint ventures and associates.</p> <p> <strong>Policy disclosed by the Company in its financial statements for the year ended 31 March 2025:</strong><br /> The Company recognises its investment in subsidiaries, associates and joint ventures at cost less any impairment losses. The said investments are tested for impairment whenever circumstances indicate that their carrying values may exceed the recoverable amount (viz. higher of the fair value less costs to sell and the value in use).</p> <p> <strong>Comments on the Policy disclosed by the Company in its financial statements for the year ended 31 March 2025:</strong><br /> The company has disclosed the policy under the heading of financial instruments – Recognition, classification and presentation without giving a separate sub-heading. The company has rightly presented investments in subsidiaries, joint ventures and associates as a separate line item in Balance Sheet. Similarly, the company is recommended to disclose accounting policy on investment in subsidiaries, joint ventures and associates with either separate heading or separate sub-heading within the policy on financial instruments.</p>