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We comment on the proposed amendments regarding the application of the investment entities exemption

  • Deloitte Comment Letter Image

15 Sep 2014

We have published our comment letter on the IASB's Exposure Draft 'Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28)'.

We are concerned that two of the three proposals in the Exposure Draft result in arrangements being differentiated on a basis other than the relevance of the resulting information:

  • A subsidiary providing services that relate to the parent's investment activities. We believe that the proposals to subsume a service providing entity into a single fair value number will, for some arrangements, result in an inappropriate lack of transparency and that they will allow structuring opportunities.
  • Application of the equity method by a non-investment entity investor to an investment entity investee. We believe that an assumed difference in the ease of obtaining information is not sufficient reason to introduce a difference in the equity method of accounting for associates and joint ventures.

Click for the full comment letter.

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