Deloitte Touche Tohmatsu Limited has responded to the International Accounting Standards Board’s (IASB) Exposure Draft ED/2013/10 Equity Method in Separate Financial Statements.

We do not object to the proposal, as a short-term measure, if certain modifications are made prior to finalising the amendments to address the issue raised by entities in certain jurisdictions that require the use of the equity method to account for its investments in subsidiaries, joint ventures and associates in preparing its separate financial statements. We are concerned, however, that full consideration surrounding the conceptual issues in both separate financial statements and the equity method of accounting has not been taken.

We also do not agree with the suggested amendment to IAS 28 because we do not believe that the principles applied to loss of control over a subsidiary in IFRS 10 should be applied in a situation where loss of control does not result in a change in the method of accounting applied because both subsidiaries and associates or joint ventures are accounted for using the equity method.

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