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IND AS 112 – Disclosure of the Interest in the Other Entities


IND AS 112, disclosure of interest in other entities needs the entity to provide users with information that permits them to estimate the nature of, and risks linked with, its interests in other entities and the result of those interests on its financial position, financial performance and cash flows.

IND AS 112 has been implemented by an entity that has an interest in any of the following given below:

  • Subsidiaries,
  • Joint arrangements (i.e., joint operations or joint ventures),
  • Associates, and
  • Unconsolidated structured entities.

All the requirements of this IND AS 112 (except with respect to the disclosure of summarized financial information) would also appeal to subsidiaries, joint arrangements, associates, and unconnected structured entities that have classified or comprised in a disposal group that is classified as held for sale or discontinued operations under Indian Accounting Standard (IND AS) 105, Non-current Assets Held for Sale and Discontinued Operations.

If an entity is a consolidated subsidiary, it provides information in its CFS (consolidated financial statements) that helps users understand its composition and NCI interests (Non-Controlling Interests) in the cash flows and activities group. It includes:

  • The nature and expansion of the significant restrictions on the ability of entities to use or access of assets of a group or settle liabilities of the group,
  • Specific information on any subsidiaries with material Non-Controlling Interests (NCI), such as financial information for the subsidiary and information about the proportion of Non-Controlling Interests  (NCI) and accumulated Non-Controlling Interests (NCI),
  • Consequences of changes in its ownership in a subsidiary control and of losing control, and
  • Nature of and any changes in the risk associated with the interests in consolidated structured entities.

Suppose the entity has hold interests in joint arrangement and associates. In that case, it provides the information in its CFS (consolidated financial statement) that helps users to understand the nature and risks associated with these interests. It includes:

  • Significant restrictions on the ability of a joint arrangement to transfer cash dividends or to repay loans and advances,
  • The nature, extent, and financial impact of holding an interest in a joint arrangement or an associate, and
  • Any commitments and contingent liabilities regarding a joint arrangement or an associate.

Suppose the entities have held any interests in the consolidated structured entities. In that case, it must disclose the terms of any legal arrangement that could require it to provide financial support to the combined structured entity.

Suppose the entities have hold interests in the unconsolidated structured entities. In that case, it must provide disclosures that authorize users to understand the specific risks arising by holding these interests and their nature. The required disclosures include:

  • General information about the interests in unconsolidated entities such as the nature, purpose, size, and activities of an unconsolidated structured entity, and
  • Information about the nature of risk: such as carrying amounts of assets and liabilities recognized in the consolidated financial statements (CFS), maximum exposure to loss from the holding, and any commitments to provide financial support.

If the entity is not an interest in an unconsolidated structured entity but has sponsored such an entity, then it has disclosed the following:

  • Method for determining how a sponsored entity was identified,
  • Income from the structured entity in the period of reporting, and
  • Carrying amount of all assets that have transferred to the structured entity during the period of reporting.

An investment entity informally discloses quantitative data about its exposure to risks arising from unconsolidated subsidiaries. In addition, to the extent that an investment entity does not have typical characteristics, it discloses the significant judgments and assumptions made in concluding that it has an investment entity.

At AJSH, we assist our clients in bookkeeping, payroll, auditing, taxation, secretarial compliances, and preparation of financial statements ensuring ompliance with applicable accounting standards. If you have any questions or wish to know more about compliances with Ind AS 112 disclosure of the interest in the other entities, kindly contact us.


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