Responses to IASB Documents for Comment

IAS 27 Separate Financial Statements

Exposure Draft – Measuring Quoted Investments in Subsidiaries, Joint Ventures and Associates at Fair Value (Proposed amendments to IFRS 10, IFRS 12, IAS 27, IAS 28 and IAS 36 and Illustrative Examples for IFRS 13) – September 2014

On January 16, 2015, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in September 2014. The letter supports the clarification that the unit of account for investments within the scope of IFRS 10, IAS 27 and IAS 28 is the investment as a whole. However, the letter disagrees that the product of the quoted price of the share multiplied by the quantity of financial instruments held, or PxQ, without adjustments, should always determine the fair value of quoted investments in subsidiaries, joint ventures and associates. The letter also disagrees that PxQ, without adjustments, should always determine the fair value of the recoverable amount of a cash generating unit that corresponds to a quoted entity measured on the basis of fair value less costs of disposal. The letter observes that mandating the use of unadjusted Level 1 inputs in order to result in measurements that are objective and verifiable comes at the expense of not reflecting marketplace realities accurately. Read the AcSB letter posted by the IASB.

Exposure Draft – Equity Method in Separate Financial Statements (Proposed amendments to IAS 27) – December 2013

On February 4, 2014, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in December 2013. The letter supports the proposal to permit the equity method as one of the options to account for an entity’s investment in subsidiaries, joint ventures and associates in the entity’s separate financial statements. However, the letter requests that the consequential amendment to IAS 28 be redrafted to reflect more clearly the accounting the IASB intended when an entity loses control of a subsidiary and the investment continues to be classified as either an associate or a joint venture. Read the AcSB letter posted by the IASB.