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Elimination of Gains or Losses Arising from "Downstream" Transactions (Proposed Amendments to IFRS 10 and IAS 28) [Completed]

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At its June 2015 meeting, the IASB decided to suspend work on these proposals and to consider these issues as part of a wider research project on the equity method of accounting.

Last updated:

June 2015


The IFRIC received a request to clarify the accounting for a "downstream" transaction between an entity and its joint venture in which the amount of the entity's share of the gain to be eliminated in accordance with paragraph 28 of IAS 28 exceeds the amount of entity's interest in the joint venture. Whether: (a) the gain from the transaction should be eliminated only to the extent that it does not exceed the carrying amount of the entity's interest in the joint venture, similarly to the requirement in paragraph 39 of IAS 28; or (b) the remaining gain in excess of the carrying amount of the entity's interest in the joint venture should also be eliminated and, if so, against what. At its meetings in March and May of 2013, the IFRIC concluded that approach (b) was appropriate and the excess should be recorded as a “deferred gain”.  The IFRIC observed that IAS 28 does not provide sufficient guidance on this issue.


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