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Deloitte comment letter on tentative agenda decision on IFRS 10 — Definition of investment-related services or activities

Published on: Jan 21, 2014

Deloitte's IFRS Global Office has submitted a letter of comment responding to the IFRS Interpretations Committee's tentative decision not to take onto the Committee’s agenda a request for clarification of the definition of "investment-related services or activities" as it related to "tax optimization" intermediate subsidiaries.

The letter, which expresses the views of Deloitte's IFRS Global Office only, includes the following opinions:

  • We agree with the IFRS Interpretations Committee’s decision not to add this item onto its agenda and can accept the Committee’s reading of paragraph BC272 in the Basis for Conclusions of IFRS 10, Consolidated Financial Statements, in the context that an entity that exists solely for tax purposes.
  • We do not agree that Example 4 in the Illustrative Examples of IFRS 10 is relevant to this consideration and recommend that this reference be removed from the agenda decision.
  • We are concerned that, as a result of its reference to the description in the submission of there being “no activity within the subsidiary,” the tentative agenda decision could be read as implying that a subsidiary incorporated primarily for "tax optimization" purposes can never be deemed to provide investment-related services. In fact, such subsidiaries are often required to provide services such as administration of regulatory or tax filings or governance services around the acquisition and disposal of investments or are also used as financing vehicles. We recommend that the agenda decision be amended to clarify that it relates only to subsidiaries that are incorporated solely for tax optimization purposes and have no other activities.

Download the full comment letter below.


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