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Consolidation — Investment entities


The objective of this project is to develop an exemption from the requirement to consolidate subsidiaries for eligible investment entities (such as mutual funds, unit trusts, and similar entities), instead requiring the use of the fair value to measure those investments.

The project originated from the consultation process around the issue of IFRS 10 Consolidated Financial Statements, where many respondents questioned the usefulness of the financial statements of investment entities if IFRSs continued to require the consolidation of entities that an investment entity controls.


Current status of the project

This project has been completed.  The IASB issued Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) on 31 October 2012.


Project milestones

June 2010 Added to the IASB's agenda
25 August 2011 Exposure Draft ED/2011/4 Investment Entities published Comment deadline 5 January 2012
31 October 2012 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) issued Effective for annual periods beginning on or after 1 January 2014

Related Discussions

  • Investment entities – Sweep issues

  • Sep 27, 2012

  • The Staff presented three issues that arose as a result of external reviewer comments on the pre-ballot draft of 'Investment Entities: Amendments to IFRS 10, IFRS 12, IAS 27 and IAS 28' (“the investment entities amendments”). The Staff asked the IASB Board members to discuss: (1) whether an investment entity should be required to have an exit strategy for substantially all of its investments, (2) the interaction between the fair value management requirement in IFRS 9 Financial Instruments and the fair value management component of the investment entity definition and (3) whether an entity that provides investment-related services to external parties should qualify as an investment entity.

  • 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.

  • Investment entities

  • Jun 13, 2012

  • The IASB and FASB discussed (1) accounting by an investment entity parent for an investment entity subsidiary (2) accounting by a non-investment entity parent for the investments of an investment entity subsidiary.

  • Investment entities

  • May 21, 2012

  • The IASB and the FASB discussed the asset-based versus entity-based guidance (IASB only consideration), the approach to entity-based investment entity guidance, the definition of an investment entity and factors to consider and application guidance.

  • Investment Entities

  • Apr 17, 2012

  • The Boards were presented with a summary of the feedback received on their respective proposals on investment entities. No decisions were made by the Boards during this session.

  • Investment entities – Sweep issues

  • Jun 15, 2011

  • The IASB discussed the investment entities project, specifically whether to permit early application of the proposals and the comment period for the upcoming exposure draft.

  • 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.