Equity Method: Share of Other Net Asset Changes (Amend IAS 28)

BACKGROUND

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend IAS 28 Investments in Associates and Joint Ventures relating to the application of the equity method.

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The objective of the project is to clarify how investors should apply IAS 28 to recognize their share of the changes in the net assets of an investee that are not recognized in profit or loss or other comprehensive income of the investee, and that are not distributions received (“other net asset changes”).

The AcSB is participating in the activities of the project to ensure that Canadian entities’ financial reporting needs are considered by the IASB. The amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting International Financial Reporting Standards (IFRSs) for publicly accountable enterprises.

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PROJECT NEWS

IASB Decision – May 2014
At its May 2014 meeting, the IASB considered finalizing the proposed amendments to IAS 28 Investments in Associates and Joint Ventures but there were insufficient IASB members in favour of approving the amendments. In light of this, the IASB will not proceed with the proposed amendments.

AcSB Response – Equity Method: Share of Other Net Asset Changes (Proposed amendments to IAS 28)
On March 22, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in November 2012. The letter does not support developing a narrow scope amendment to IAS 28 and instead suggests that the IASB expedite its work on the equity method of accounting. The letter also does not agree that other net asset changes should be recorded in equity. If the IASB proceeds with a narrow scope amendment, the letter recommends including the effect of other net asset changes in profit or loss. Read the AcSB letter posted by the IASB.

AcSB Decision Summary – February 13, 2013
The AcSB discussed the issues to be addressed in its response to the IASB’s Exposure Draft on “Equity Method: Share of Other Net Asset Changes (Proposed Amendments to IAS 28).” No decisions were made.

Exposure Draft – Equity Method:  Share of Other Net Asset Changes (Proposed Amendments to IAS 28)
December 10, 2012.  The AcSB has issued an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Canadian stakeholders are encouraged to submit their comments, on the form provided, by March 22, 2013.

Exposure Draft – Equity Method: Share of Other Net Asset Changes (Proposed amendments to IAS 28)
November 28, 2012. The IASB has issued an Exposure Draft proposing amendments to IAS 28 Investments in Associates and Joint Ventures. Canadian stakeholders are encouraged to submit their comments to the IASB by March 22, 2013.

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.