Responses to IASB Documents for Comment
IFRS 12 Disclosure of Interests in Other Entities
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.