IFRS® Standards

Investment Entities: Applying the Consolidation Exemption (Amend IFRS 10 and IAS 28)

Summary

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend International Financial Reporting Standard (IFRS) 10 Consolidated Financial Statements and International Accounting Standard (IAS) 28 Investments in Associates and Joint Ventures relating to three issues about the application of the requirement for investment entities to measure subsidiaries at fair value.

Staff Contact(s)

Meeting & event summaries


September 3, 2014

AcSB Decision Summary – September 3-4, 2014

The AcSB discussed an issue raised during the consultation on the IASB’s Exposure Draft, “Investment Entities: Applying the Consolidation Exception.” The issue related to the proposal that an investment entity consolidates only those subsidiaries that act as an extension of the operations of the investment entity parent and do not themselves qualify as investment entities. While many stakeholders consulted supported the clarification, other stakeholders were concerned that applying the consolidation exception for investment entities and measuring subsidiaries at fair value may result in a lack of transparency of the underlying investments when an investment entity parent conducts all its investing activities through its subsidiaries. The AcSB approved its response letter to the Exposure Draft that includes reiterating its support for fair value accounting by investment entities and highlighting the concern raised by these stakeholders. The AcSB will monitor the effect of the IFRS 10 amendments on the comparability of investment entity financial statements in Canada.

Canadian stakeholders are encouraged to submit their comments directly to the IASB by September 15, 2014.

News


December 22, 2014

News

Final Amendments – Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10 and IAS 28)

December 22, 2014. The IASB has issued narrow-scope amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investment in Associates and Joint Ventures to clarify the requirement for investment entities to measure subsidiaries at fair value. The amendments are effective for annual periods beginning on or after January 1, 2016 with earlier application permitted.

September 15, 2014

News

AcSB Response – Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28)

On September 15, 2014, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in June 2014. The letter supports the proposals in the Exposure Draft. The AcSB continues to think that fair value of controlled investments provides the most relevant information to the users of investment entity financial statements. The letter acknowledges that while many stakeholders consulted support the proposals, some concerns were raised by certain stakeholders. These stakeholders were concerned that applying the consolidation exception for investment entities and measuring subsidiaries at fair value may result in a lack of transparency of the underlying investments when an investment entity parent conducts all its investing activities through its subsidiaries. The letter notes that the AcSB will monitor the effect of the IFRS 10 amendments on the comparability of investment entity financial statements in Canada. Read the AcSB letter posted by the IASB.

June 27, 2014

News

AcSB Exposure Draft – Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28)

June 27, 2014. 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 September 15, 2014.

June 16, 2014

News

IASB Exposure Draft – Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28)

June 16, 2014. The IASB has issued an Exposure Draft proposing amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures to clarify three issues about the application of the requirement for investment entities to measure subsidiaries at fair value. Canadian stakeholders are encouraged to submit their comments to the IASB by September 15, 2014.

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.