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Deloitte comment letter on IASB proposed amendments to IFRS 10 and IAS 28

Published on: Sep 15, 2014

Deloitte's IFRS Global Office has responded to the IASB's exposure draft ED/2014/2, Investment Entities: Applying the Consolidation Exception (Proposed amendments to IFRS 10 and IAS 28).

The IASB's proposed amendments aim at clarifying the following aspects:

  • The suggested amendments confirm that an entity can apply the consolidation exemption even if its parent entity measures its subsidiaries at fair value in accordance with IFRS 10.
  • A subsidiary that provides services related to the parent's investment activities should not be consolidated if the subsidiary itself is an investment entity.
  • When applying the equity method, a noninvestment entity investor in an investment entity retains the fair value measurement applied by the associate to its interests in subsidiaries, unless the noninvestment entity investor is a joint venturer where the joint venture is an investment entity.

Deloitte's IFRS Global Office is concerned that two of these three proposals result in arrangements being differentiated on a basis other than the relevance of the resulting information:

  • The Global Office believes 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.
  • The Global Office believes 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.

Download the full comment letter below.


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