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Consolidation — Comprehensive project

Background

The objective of this project is to develop a single consolidation model applicable to all entities that would be based on the concept of control and improve disclosures of consolidated and unconsolidated entities (replacing both IAS 27 Consolidated and Separate Financial Statements and SIC-12).

 

Current status of the project

The IASB issued IFRS 10 Consolidated Financial Statements on 12 May 2011.

As a result of feedback received during the project, the IASB agreed to undertake a supplementary project which seeks to exempt eligible investment entities (such as mutual funds, unit trusts, and similar entities) from the requirement to consolidate subsidiaries, instead requiring the use of the fair value to measure those investments.

 

Project milestones

DateDevelopmentComments
April 2002 Added to the active agenda
17 September 2008 Public roundtable
18 December 2008 Exposure Draft ED 10 Consolidated Financial Statements published Comment deadline 20 March 2009
First quarter 2009 Roundtables held
January 2010 Added a project on a separate disclosure standard for interests in other entities
29 September 2010 Staff Draft IFRS X Consolidated Financial Statements published
21 April 2011 Near Final Draft of IFRS 10 published
12 May 2011 IFRS 10 Consolidated Financial Statements published
IFRS 12 Disclosure of Interests in Other Entities published
Effective for annual periods beginning on or after 1 January 2013

Related Discussions

  • Update from the IASB

  • Apr 11, 2013

  • A report was given by Chairman Hans Hoogervorst on the Accounting Standards Advisory Forum, the Effects Analysis working group, and updates on current projects.

  • Consolidation — Investment Entities

  • Jul 19, 2012

  • At the July 2012 meeting, the IASB discussed a) whether to extend the exception to consolidation to an insurer’s insurance investment fund subsidiaries; b) the reassessment requirements; c) the disclosure requirements; d) the transition requirements and effective date; e) other sweep issues; and f) whether all due process steps had been followed in the Investment Entities project.

  • Consolidation and joint arrangements – Effective dates and transition

  • Feb 15, 2011

  • The IASB considered the effective date and early application of the forthcoming IFRS 10, IFRS 11, IFRS 12, IAS 27 (revised 2011) and IAS 28 (revised 2011), unanimously agreeing to require an effective date of 1 January 2013 with early application permitted if all five standards are early adopted and limited retrospective application.

  • Consolidation

  • Dec 15, 2010

  • The IASB (1) discussed a summary of the feedback received from participants during the FASB's two public roundtables held in November 2010 (2) debated the effective date for IFRSs on consolidation, joint arrangements and disclosure of involvement with other entities.

  • Consolidation

  • Nov 12, 2010

  • The Board discussed the proposed finalisation of the IFRS on consolidation.

  • Consolidation

  • Aug 26, 2010

  • Some key discussion points include IASB deliberations have concluded (barring any sweep issues identified in drafting), a Staff Draft of the final IFRS will be available on or around 23 September on the IASB's Website FASB will hold a roundtable in Norwalk on 25 October, concentrating on variable interest entities, the IASB's Investment Companies ED is expected in late September 2010 and will have a 120-day comment period, a Staff Draft of the Joint Arrangements IFRS will also be available publicly in late September.

  • Consolidation

  • Jul 22, 2010

  • In the last step of the consolidation standard, the staff discussed with the IASB various disclosure issues raised

  • Consolidation

  • Jun 01, 2010

  • The Boards discussed staff proposals for disclosure principles that might put into effect the disclosure objective agreed at a previous meeting.

  • Consolidation

  • Jun 01, 2010

  • The IASB debated whether to require investment companies to make a disclosure similar to that which is currently required by US GAAP: a financial highlights schedule.

  • Consolidation

  • May 19, 2010

  • The Boards considered the implications of the decision to provide a fair value exception from consolidation to investment companies for associates and joint ventures.

  • Consolidation

  • May 19, 2010

  • The Board agreed that the IFRS on Consolidation would address the situation in which a controlled investee of a consolidated investment company holds an equity interest in the ultimate parent.

  • Consolidation

  • May 04, 2010

  • The Boards discussed the disclosure package for investment companies.

  • Consolidation

  • Apr 20, 2010

  • The Boards continued their discussions from the February joint meeting in assessing how an investment company should account for its investments that it controls.

  • Consolidation

  • Mar 24, 2010

  • The Boards revisited the issue of control in the context of power with less than half of the voting rights in an entity that the Boards discussed at their meeting earlier that week.

  • Consolidation

  • Mar 23, 2010

  • The Boards continued their deliberations of control in the context of power with less than half of the voting rights in an entity that the Boards discussed at their meeting on 15 March 2010.

  • Consolidation

  • Mar 16, 2010

  • The Boards assessed the consistency of the control model.

  • Consolidation

  • Feb 17, 2010

  • The Boards discussed possible guidance for investment companies that would exempt them from the requirement to consolidate entities they control.

  • Consolidation

  • Feb 17, 2010

  • The Board discussed necessary disclosure issues in advance of the March meeting.

  • Consolidation

  • Jan 19, 2010

  • The Boards discussed (1) control through voting rights, (2) effects of options and convertible instruments on the control model, (3) the role of kick-out rights and (4) agency relationships.

  • Consolidation

  • Dec 17, 2009

  • The Boards had a short session on consolidation where they discussed the current state of the project and the decisions made by both Boards until now.

  • Consolidation

  • Oct 26, 2009

  • The purpose of this session was to (1) discuss the convergence approach, if any, to be taken by both Boards in finalising their projects on consolidation and (2) identify consolidation issues for deliberation by both Boards at future joint meetings.

  • Consolidation

  • Oct 23, 2009

  • The Board held a preliminary discussion of the effects of an agency relationship in consolidation.

  • Consolidation

  • Oct 20, 2009

  • The Board discussed the definition of control of an entity.

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