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Previously Held Interests in a Joint Operation (Amendments to IFRS 3 and IFRS 11) [Completed]

Effective date and transitional provisions:

The amendments are effective for annual reporting periods beginning on or after January 1, 2019, with earlier application permitted.

Next steps:

The AcSB expects to include the amendments in the CPA Canada Handbook in the first half of 2017.

Last updated:

December 2017

 

Overview

The Amendments to IFRS 3 and IFRS 11 were originally included in Exposure Draft ED/2016/1, Definition of a Business and Accounting for Previously Held Interests. However, the IASB believed that these amendments meet the criteria for annual improvements and therefore included them in the Annual Improvements to IFRS Standards 2015–2017 Cycle.

Annual Improvements to IFRS Standards 2015–2017 Cycle makes amendments to the following standards:

IFRS Subject of amendment

IFRS 3, Business Combinations and IFRS 11, Joint Arrangements

The amendments to IFRS 3 clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to IFRS 11 clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.

IAS 12, Income Taxes

The amendments clarify that all income tax consequences of dividends (i.e. distribution of profits) should be recognized in profit or loss, regardless of how the tax arises.

IAS 23, Borrowing Costs

The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings.

 

Other developments

December 2017

On December 12, 2017, the International Accounting Standards Board (IASB) issued Annual Improvements to IFRS Standards 2015–2017 Cycle. The pronouncement contains amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 as result of the IASB's annual improvements project.

September 2017

On September 22, 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue the final amendments to IFRS 3 and IFRS 11 in December 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 IFRS 3 and IFRS 11 in Q4/2017.

April 2017

On April 28, 2017, the IASB staff issued an updated Work Plan which indicates that the IASB expects to issue the final IFRS amendments to IFRS 3 and IFRS 11 after October 2017.

March 2017

On March 23, 2017, the IASB staff issued an updated Work Plan which indicates that the IASB expects to decide the project direction by June 2017.

September 2016

On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to decide the project direction by March 31, 2017.

August 2016

On August 8, 2016, the AcSB issued for comment an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Comments to the AcSB are requested by October 31, 2016. 

July 2016

On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to decide the project direction sometime after January 31, 2017.

June 2016

On June 28, 2016, the IASB issued for comment an Exposure Draft of proposed amendments to IFRS 3 and IFRS 11 in respect of accounting for previously held interests.

February 2016

In February 2016, the IASB staff updated the Work Plan to indicate that an ED is expected to be issued in May 2016.

 

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