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IFRS 5 — Application of IFRS 5 to loss of significant influence over an associate or a jointly controlled entity

Date recorded:

The IFRIC considered application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations to loss of significant influence over an associate or jointly-controlled entity. The staff noted that, in February, the IASB tentative decided that the term 'significant economic event' would be limited to loss of control (and not relate to loss of significant influence over an associate and jointly controlled entity. Therefore, the proposed amendment of IFRS 5 is no longer relevant.

The majority of IFRIC members were concerned with this decision of the Board and expressed their view that the accounting could be difficult to understand. In the view of many IFRIC members, the 'old logic' reflected in the original proposed amendment was articulated more clearly than the new reasoning related to the borders of the entity. The IFRIC members agreed to ask the Board to explicitly consider, in the Board's deliberation of ED 9 Joint Arrangements, the implications of the Board's decision to change the definition of significant economic event on IFRS 5 and to provide consistent answers in ED 9 and IFRS 5.