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Sunday 15 December 2019

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Project news

Project news


At its June 2015 meeting, the IASB decided to suspend work on these proposals and to consider these issues as part of a wider research project on the equity method of accounting

 24 June 2015


On 24 June 2015 the IASB met to consider the planned scope of, and approach to, its research project on the equity method of accounting. The IASB tentatively decided:

  1. to undertake a limited-scope research project that seeks to address application problems arising from the equity method requirements IAS 28 Investments in Associates and Joint Ventures.

    Nine of the thirteen IASB members present agreed with this decision and four disagreed.

  2. that the methodology for the limited scope research project should assume that:
    1. control is the appropriate basis for determining the reporting group;
    2. associate and joint venture entities are not part of the group and therefore their assets and liabilities should not be recognised separately in the financial statements; and
    3. the unit of account is the investment as a whole.
    Nine of the thirteen IASB members present agreed with this decision and four disagreed.

  3. the limited-scope project should seek to address the matters currently being considered by the Interpretations Committee in developing a narrow-scope amendments to IAS 28. The application date of the amendment issued in September 2014 to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures (2011): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture will be deferred.

    Eleven of the thirteen IASB members present agreed with this decision and two disagreed.

  4. to assess separately the equity method of accounting as applied to subsidiaries in separate financial statements; and

    Ten IASB of the thirteen members present agreed with this decision and three disagreed.

  5. to consider the need for a wider research project on the equity method of accounting after completion of the Post implementation Reviews of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities.

    Ten IASB of the thirteen members present agreed with this decision and three disagreed.

Next steps

The staff will present a more detailed analysis of the equity method of accounting and possible changes in the method as currently applied in IAS 28 to the IASB in the third quarter of 2015.

 


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