IAS 27 Consolidated and Separate Financial Statements – Put options written over non-controlling interests

Date recorded:

The Committee continued its deliberations on the accounting for put options over non-controlling interest. The Chairman summarised the Committee's discussions as being unable to reach a consensus as to whether or not IAS 39 is the appropriate Standard to apply and whether or not changes in the fair value of the liability should be recognised in profit or loss.

Some Committee members suggested that this matter be referred to the Board to be incorporated with the FICE project and any changes being made to IAS 32. As the matter is on the agenda for the September Board meeting, it will the perfect time to point out this apparent inconsistency between IAS 27 and IAS 32 to the Board and communicate the Committee's discussions and thoughts on the matter. The other Committee members agreed with the recommendation to remove this item from the Committee's agenda as it is unlikely that the Committee will reach a consensus in a timely manner.

Several Committee members were uncomfortable with the underlying message being communicated by the proposed wording of the tentative agenda decision. Some members were also concerned with specifically saying that IAS 39 should be applied, while others were uncomfortable being silent on which IFRS to apply.

A Committee member recommended keeping the wording of the tentative agenda decision neutral and rather require entities to disclose the treatment applied. Another Committee member recalled that the Committee was in favour of applying IAS 39, however some difficulty is created by this approach and therein lies the inability to reach a consensus.

The Chairman asked the staff to revise the wording of the tentative agenda decision to include reference to IAS 32 and 39 and explain the difficulties with the consequences of that, and hence the Committee is unable to reach a timely consensus.

[3 September 2010]

The staff tabled the revised wording of the tentative agenda decision not to continue work on the matter and referring it to the Board for consideration. Subject to drafting suggestions, the Committee approved the revised wording.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.