IAS 28 — Potential effect of revised versions of IFRS 3 and IAS 27 on equity method accounting

Date recorded:

The IFRIC in November 2008 discussed four issues:

  • How the initial carrying value of an equity method investment should be determined
  • How an impairment assessment of an underlying indefinite-lived intangible asset of an equity method investment should be performed
  • How an equity method investee's issuance of shares should be accounted for
  • How to account for a change in an investment from the equity method to the cost method

For issues 2 and 4, the IFRIC agreed in November 2008 not to add the item to the agenda. This decision was confirmed by the IFRIC.

The staff informed the IFRIC that the IASB staff is undertaking a project to address issues raised by constituents arising from the Business Combinations II project. Issues 1 and 3 would be addressed as part of that project. It was explained that some of the issues could end up as Interpretations, as agenda decisions, or as part of the IASB's annual improvements process.

In the light of this the IFRIC decided also not to add issues 1 or 3 to its agenda as they addressed by a concurrent Board project.

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