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IAS 32 — Put options over non-controlling interests (NCIs)

Background

A project to determine how an entity should account for changes in the carrying amount of financial liability for a written put option over a non-controlling interest (NCI, previously referred to as 'minority interest').

This project seeks to address a potential inconsistency between the requirements of IAS 32 Financial Instruments: Presentation, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 9 Financial Instruments for measuring financial liabilities and the requirements in IAS 27 Consolidated and Separate Financial Statements and IFRS 10 Consolidated Financial Statements for accounting for transactions with owners in their capacity as owners; that is, whether the offsetting entry for subsequent measurement changes should be to profit or loss or to equity.

Originally an IFRS Interpretations Committee project, the IASB subsequently decided to proceed with the project as a board-level narrow scope amendment project.

 

Current status of the project

The Committee released Draft Interpretation DI/2012/2 Put Options Written on Non-controlling Interests on 31 May 2012.  At its March 2013 meeting, the IASB decided to recommend that the Committee not finalise the draft Interpretation and instead the IASB will now undertake a narrow scope amendment to IAS 32.  Next steps in the project will be determined in the second quarter of 2014.

 

Project milestones

DateDevelopmentComments
May 2010 Added to the IFRS Interpretations Committee agenda
September 2010 The Committee decided to refer this matter to the IASB for resolution
March 2011 Committee recommends the IASB implement a scope exclusion from IAS 32 to deal with the issue The IASB rejected the scope exclusion to IAS 32 at its September 2011 meeting
31 May 2012 Draft Interpretation DI/2012/2 Put Options Written on Non-controlling Interests Comment deadline 1 October 2012
March 2013 Reactivated as an IASB narrow scope amendment project Draft Interpretation will not be finalised

Related Discussions

  • IFRIC update (IASB only)

  • Feb 18, 2013

  • The staff presented the IFRS Interpretations Committee’s (the “Committee”) January 2013 IFRIC Update newsletter, providing an update of the issues discussed at the 22-23 January 2013 Committee meeting.

  • IAS 32 — Put options written on non-controlling interests

  • May 15, 2012

  • The IFRS Interpretations Committee decided to issue a draft Interpretation clarifying a NCI put gives rise to a financial liability that is initially measured at the present value of the redemption amount in the parent’s consolidated financial statements and that subsequent remeasurement of the liability would be measured in accordance with IAS 39 or IFRS 9

  • IAS 27/IAS 32 — Put options over non-controlling interests

  • Mar 01, 2012

  • The IASB discussed aspects of prior discussions held by the IFRS Interpretations Committee on aspects of the accounting for put options written on non-controlling interests in the consolidated financial statements of the controlling shareholder ('NCI puts').

  • IAS 32 — Put options written over non-controlling interests

  • Jan 17, 2012

  • The IFRS Interpretations Committee continued its discussions on how changes in the value of a put option over non-controlling interests should be accounted for. The Committee tentatively agreed to move forward with the development of application guidance.

  • Put options over non-controlling interests

  • Nov 16, 2011

  • The Board voted not to amend the scope of IAS 32 to exclude put options over non-controlling interests. However, the Board expressed support for considering clarifying the accounting for subsequent changes in the measurement of such puts rather than by changing the measurement basis of the non-controlling interest.

  • IAS 32 – Put options written over non-controlling interests

  • Mar 10, 2011

  • The IFRS Interpretations Committee continued its discussion on the accounting for written put options over non-controlling interests, ultimately agreeing to support a proposal for a scope exclusion to IAS 32 so that written puts over non-controlling interests would be accounted for similar to other derivative contracts .

  • IFRS Interpretations Committee update

  • Nov 16, 2010

  • The IASB discussed two issues discussed by the IFRS Interpretations Committee at their November meeting: (1) vesting and non-vesting conditions under IFRS 2 (2) put options written over non-controlling interests.

  • IFRS Interpretations Committee update

  • Jul 21, 2010

  • The IASB was provided an update on the activities of the IFRS Interpretations Committee including developments from the meeting on 8-9 July 2010, and held a brief discussion on the Committee's agenda topic of put options written over non-controlling interests.

  • IAS 27 — Put options written over non-controlling interests

  • Jul 08, 2010

  • The IFRS Interpretations Committee initially addressed two broad scoping questions: identifying which components of the accounting for put options written over non-controlling interests (NCI), and which put options written over NCI should be within the scope of the proposed interpretation.

  • IAS 27 — Puts on non-controlling interest

  • May 06, 2010

  • The Committee started its discussion on the request for additional guidance how an entity should account for changes in carrying amount of financial liability for a put option, written to a non-controlling interest shareholder (NCI put), in the consolidated financial statement of a parent.

All Related