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IASB proposes deferring the effective date of September 2014 amendments to IFRS 10 and IAS 28

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10 Aug 2015

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28 'Investments in Associates and Joint Ventures'. The amendments aim at deferring the effective date of the September 2014 amendments to these standards indefinitely until the research project on the equity method has been concluded. Comments are requested by 9 October 2015.

 

Background

On 11 September 2014, the IASB issued Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) as result of the work on one of the issues in relation to the transfers of assets between an investor and its associates or joint ventures the IASB was considering. Among the issues that were also considered at that time was the elimination of gains or losses arising from transactions between an entity and its associate or joint venture where an exposure draft (ED) had been announced for November 2014 but was never published. A second attempt at progressing with the issues in the November ED was undertaken in February 2015, now combined with addressing an identified conflict of the September 2014 amendments with IAS 28. However, in June 2015 the IASB decided that it wants to deal with the issues in the February ED more comprehensively as part of its research project on the equity method of accounting. To avoid that entities would need to change the way in which they apply IAS 28 twice in a short period of time the IASB also decided to defer the effective date of the September 2014 amendments until it has finalised amendments, if any, that result from the research project on the equity method.

 

Suggested changes

The amendments proposed in ED/2015/7 Effective Date of Amendments to IFRS 10 and IAS 28 aim at deferring the effective date of the September 2014 amendments to these standards indefinitely until the research project on the equity method has been concluded. The IASB suggests that earlier application of the September 2014 amendments should continue to be permitted.

 

Timeframe

Comments on the proposal are requested by 9 October 2015. The IASB will then consider the comments received to decide whether to proceed with this amendment. As the effective date of the 2014 amendments is currently 1 January 2016, the IASB would need to finalise its proposal 31 December 2015 in order to achieve the intended deferral.

 

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