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The Interpretations Committee tentatively decided to hold the issue

 27 January 2015


The Interpretations Committee received a request to clarify what factors may indicate that a fund manager has significant influence over a fund that it manages and in which it has a direct holding.

The submitter described a particular situation in which an assessment of control under IFRS 10 Consolidated Financial Statements resulted in the conclusion that the fund manager does not control the fund that it manages and in which it has a direct holding, because it is acting as an agent in accordance with paragraphs B58–B72 of IFRS 10. The submitter raised two questions in respect of this particular situation:

  1. whether the fund manager should assess whether it has a significant influence over the fund; and
  2. if yes, how should it make such an assessment.

The Interpretations Committee noted that a fund manager that concludes it is an agent in accordance with IFRS 10 should assess whether it has significant influence. The Interpretations Committee further noted that a fund manager would need to make that assessment in accordance with the guidance in IAS 28. In particular it should consider:

  1. its holding in the fund; and
  2. whether its power to participate in financial and operating policy decisions, combined with its holding in the fund, constitute significant influence.

At this meeting, Interpretations Committee members noted that IFRS 10 did not make any consequential amendments to IAS 28 in relation to the assessment of significant influence. However Interpretations Committee members did not reach agreement on whether and how a power to participate in financial and operating policy decisions that is held in the capacity of an agent should affect the assessment of significant influence.

The Interpretations Committee noted that the IASB currently has a research project on the subject of equity accounting, but that it is not clear at this stage whether the assessment of significant influence will form part of that project. Consequently, the Interpretations Committee decided to monitor how that research project progresses, and to revisit this issue if the research project does not address it.

 

 

 

 

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