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Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) [Completed]

Ef­fec­tive date:

The amendments are effective for periods beginning on or after January 1, 2019. Earlier application is permitted. This will enable entities to apply the amendments together with IFRS 9, if they wish so, but leaves other entities additional implementation time.

The AcSB is­sued the fi­nal Hand­book ma­te­r­ial in November 2017.

Transitional provisions:

The amendments are to be applied retrospectively, but they provide transition requirements similar to those in IFRS 9 for entities that apply the amendments after they first apply IFRS 9. They also include relief from restating prior periods for entities electing, in accordance with IFRS 4, Insurance Contracts, to apply the temporary exemption from IFRS 9. Full retrospective application is permitted if that is possible without the use of hindsight.

Last updated:

November 2017

Overview

This item was initially included in the Annual Improvements 2015-2017 Project, but has been moved in May 2017 to its own separate project.

The issue relates to whether the measurement, in particular relating to impairment, of long term interests in associates and joint ventures that, in substance, form part of the ‘net investment’ in the associate or joint venture should be governed by IFRS 9, IAS 28 or a combination of both.

IFRS 9, Financial Instruments excludes interests in associates and joint ventures accounted for in accordance with IAS 28, Investments in Associates and Joint Ventures. However, some stakeholders have said it is not clear whether that exclusion applies only to interests in associates and joint ventures to which the equity method is applied. 

In this amendment the IASB clarified that the exclusion in IFRS 9 applies only to interests a company accounts for using the equity method. A company applies IFRS 9 to other interests in associates and joint ventures, including long-term interests to which the equity method is not applied and that, in substance, form part of the net investment in those associates and joint ventures.

In October 2017, the Board issued Long-term interests in Associates and Joint Ventures (Amendments to IAS 28). The amendments clarify that a company applies IFRS 9 Financial Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture.

 

Other developments

November 2017

On November 1, 2017, the AcSB issued the final Handbook material.

October 2017

On October 12, 2017, the IASB published Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) to clarify that an entity applies IFRS 9 "Financial Instruments" to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied.

July 2017

On July 21, 2017, the staff of the IASB updated the work plan to indicate that the IASB expects to issue the final amendments to IAS 28 in October 2017.

June 2017

In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue the final amendments to IAS 28 in September 2017.

May 2017

On May 18, 2017, the IASB staff is­sued an up­dated Work Plan which in­di­cates that this in respect of Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) has been moved to its own separate project.

Feb­ru­ary 2017

On Feb­ru­ary 9, 2017, the AcSB is­sued an Ex­po­sure Draft that cor­re­sponds to the IASB’s Ex­po­sure Draft. Stake­hold­ers are en­cour­aged to sub­mit their com­ments by April 12, 2017.

Jan­u­ary 2017

On Jan­u­ary 12, 2017, the IASB pub­lished an Ex­po­sure Draft, An­nual Im­prove­ments to IFRS Stan­dards 2015–2017 Cy­cle. It con­tains pro­posed amend­ments to three IFRSs as re­sult of the IASB's an­nual im­prove­ments pro­ject. Com­ments are re­quested by April 12, 2017.

Oc­to­ber 2015

In Oc­to­ber 2015, the IASB for­mally added the An­nual Im­prove­ments to IFRSs 2015-2017 Cy­cle pro­ject to its agenda. An ex­po­sure draft is ex­pected in 2016 at the ear­li­est.

 

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