IFRS 11 — The separate financial statements of a joint operator

Date recorded:

The IASB has agreed in May 2013 that IAS 27 Separate Financial Statements should be amended to allow an entity to measure its investment in a subsidiary, associate or joint venture using the equity method in its separate financial statements.

The staff raised the question brought by a national standard-setter how an interest in a joint operation by a joint operator should be accounted for in its separate financial statements. There is no guidance in IFRS 11 Joint Arrangements which only refers to other standards for the accounting treatment.

One Board member preferred if this question would be addressed in the post-implementation review (PIR). He was concerned that the Standard will be revised for all bits and pieces in the next years and that this will be an endless journey.

Another Board member mentioned that most of the Standards were developed with regards to consolidated financial statements and that many Standards have issues when it comes to separate financial statements. It might be therefore helpful to have a general project on separate financial statements.

Several Board members pointed out that the fact pattern brought up by the national standard-setter was too specific.

The Board concluded that the accounting of joint operations was inadvertently omitted from IFRS 11 and that the matter should be brought to the attention of the IFRS Interpretations Committee. The staff should decide, together with the Interpretations Committee, what the next steps are.

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