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EFRAG draft comment letter on equity method

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

09 Jan 2014

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB's Exposure Draft ED/2013/10 'Equity Method in Separate Financial Statements (proposed amendments to IAS 27)' that was published on 2 December 2013.

EFRAG supports the IASB's proposed amendments to IAS 27 Separate Financial Statements, stating in its draft comment letter that the amendments better align the accounting principles applicable to different sets of financial statements. However, the EFRAG suggests the following issues for reconsideration:

  • Consequential amendments to IAS 28 Investments in Associates and Joint Ventures — EFRAG encourages the IASB to better explain why they are necessary in the Basis for Conclusions.
  • Retrospective application — EFRAG thinks that "relief should be provided from full retrospective application to entities that opt to use the equity method to account for subsidiaries in their separate financial statements".
  • Objective of separate financial statements — EFRAG would like the IASB to clarify the objective of separate financial statements in this project and in the future.

Comments on the EFRAG draft comment letter invited by 30 January 2014.

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