FYI Article – Amendments to IFRS 10 and IAS 28: Effective Date Is Being Postponed!
In August 2015, the International Accounting Standards Board (IASB) published an Exposure Draft, “Effective Date of Amendments to IFRS 10 and IAS 28,” proposing to defer indefinitely the effective date of narrow-scope amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, while retaining the ability for entities to apply the amendments earlier.
What Originally Happened?
In September 2014, the IASB issued Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28). These amendments require a full gain or loss to be recognized when a transaction between an investor and its associate or joint venture involves assets that constitute a business. They also require a partial gain or loss to be recognized when a transaction between an investor and its associate or joint venture involves assets that do not constitute a business.
The amendments are included in Part I of the CPA Canada Handbook – Accounting and are effective for annual periods beginning on or after January 1, 2016 with earlier application permitted.
What Does this Mean for Me Now?
By end of this year, it is expected that the IASB will defer the effective date of these amendments until after the IASB carries out a planned broader review of the topic. After the AcSB completes its due process to approve the deferred effective dates, the amendments to IFRS 10 and IAS 28 will be moved to the "IFRSs issued but not yet effective" section of Part I. This means that entities can wait to apply the amendments to IFRS 10 and IAS 28.
Grace Lang, CPA, CA, CPA (Illinois)
Principal, Accounting Standards Board
Phone: +1 (416) 204-3478