Global Standards for the world economy

Monday 23 September 2019

Banner graphic

Project news


The Interpretations Committee tentatively decided not to add this item to its agenda

 08 November 2016



The Interpretations Committee received a request to clarify whether, and, if so, how, a fund manager assesses significant influence over a fund that it manages and in which it has an investment. In the scenario described in the submission, the fund manager applies IFRS 10 Consolidated Financial Statements and determines that it is an agent, and thus does not control the fund. The fund manager has also concluded that it does not have joint control of the fund.

The Interpretations Committee observed that a fund manager assesses whether it has control, joint control or significant influence over a fund that it manages applying the relevant IFRS Standard, which in the case of significant influence is IAS 28 Investments in Associates and Joint Ventures.

The Interpretations Committee noted that, unlike IFRS 10 in the assessment of control, IAS 28 does not contemplate whether and how decision-making authority held in the capacity of an agent affects the assessment of significant influence. Developing any such requirements could not be undertaken in isolation of a comprehensive review of the definition of significant influence in IAS 28.

The Interpretations Committee also observed that paragraph 7(b) of IFRS 12 Disclosure of Interests in Other Entitiesrequires an entity to disclose information about significant judgements and assumptions it has made in determining that it has significant influence over another entity.

The Interpretations Committee concluded that it would be unable to resolve the question efficiently within the confines of existing IFRS Standards. Consequently, it [decided] not to add the issue to its agenda.