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IAS 27 Consolidation: Control by a Fiduciary

Go To List of IFRIC Issues Issue Description: There are no specific requirements in IFRS that address accounting for investments by venture capital organisations, mutual funds, unit trusts, and similar entities that hold investments in a fiduciary capacity. As a result, depending on whether an entity has control, joint control, or significant influence over an investee, one of the following Standards is applied: IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates, or IAS 31 Interests in Joint Ventures. IFRIC is considering whether the resulting presentations are the most appropriate and related issues. Discussion at the IFRIC Meeting February 2004 The chairman briefly discussed a recent request from the EFRAG that IFRIC give consideration to the issues surrounding consolidation of investment funds by investment companies. The IFRIC agreed to debate this issue further. Staff will make a comprehensive presentation of the issues and proposed solutions at a future IFRIC meeting. Discussion at the IFRIC Meeting May 2004 The IFRIC discussed whether to add an agenda item to address whether (or when) delegated or operational control should require consolidation. IFRIC members noted this would end up being an interpretation of what "so as to receive economic benefits" means in the definition of control in IAS 27. The IFRIC concluded that this is a broader issue of consolidation that should be addressed by the IASB in its project. The IFRIC will, however, ask the IASB to identify areas IFRIC should address (if any) in conjunction with the IASB project. Project removed from IFRIC agenda.