IAS 28 — Assessment of significant influence

Date recorded:

The project manager introduced the agenda paper. He said that the issue was discussed in September 2014, the issue was a request to clarify what factors may indicate that a fund

manager had significant influence over a fund that it managed and in which it had a direct holding. He said that in that meeting the Interpretations Committee issued a tentative agenda decision noting that the issuance of IFRS 10 did not make any change to the assessment of significant influence in IAS 28 and also the agenda decision should indicate that the issue should be considered in the comprehensive project of the equity method. He then discussed about the comment letters received and said that, in general, respondents agreed with the Interpretations Committee conclusion while some respondents suggested wording changes in the agenda decision; and one respondent said that an interpretation should be issued.  He then asked whether members agreed with finalising the agenda decision and if there were comments on the agenda decision.

One Interpretations Committee member said that IAS 28 explained that significant influence was a residual; he said that he still believed that IAS 28 in itself was sufficient. The Project manager acknowledged that there could be interaction between control and significant influence assessment. The Senior Director of technical activities said that in the equity method project they would not try to change the definition of significant influence.


An observing IASB member indicated that under IFRS 10 a fund manager did not have to consider its voting rights held on behalf of others, a fund manager would only consider those voting rights directly held; he then said that on the other hand in IAS 28 a fund manager would have to consider its direct and indirect voting rights which he did not find logical.

One Interpretations Committee member said that he believed that the agenda decision did not reflect what was discussed in the last meeting when they had concluded that IAS 28 could be open to different interpretations. Another member said that by pointing out in the agenda decision that the issue should be considered in the equity method project, they were indicating that there were issues with IAS 28. Another member pointed out that IFRS 10 contains a lot of guidance about power and IAS 28 defines significant influence as “the power to participate”.

Other Interpretations Committee raised similar concerns.

The Chairman then said that they could add in the agenda decision that the IASB Board could decide that the equity method project should address those issues and if it would not be addressed then they could take back the issue.  There were no objections.

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