This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IAS 28 — Equity method: Share of other net asset changes

Date recorded:

In November 2012, the IASB published the Exposure Draft Equity Method: Share of Other Net Asset Changes (proposed amendments to IAS 28 Investments in Associates and Joint Ventures).  The objective of the proposed amendments is to provide additional guidance to IAS 28 on the application of the equity method, specifically; the proposed amendments intend to specify that:

  • an investor should recognise, in the investor’s equity, its share of the changes in the net assets of the investee that are not recognised in profit or loss or other comprehensive income (OCI) of the investee, and that are not distributions received (‘other net asset changes’); and
  • the investor shall reclassify to profit or loss the cumulative amount of equity that the investor had previously recognised when the investor discontinues the use of the equity method.

Staff suggested to the Committee that it should propose to the IASB that’s its amendment should be revised so that an investor should recognise other net asset change of the investee in the investor’s OCI. The Committee disagreed as the concept was found not to be principle based and not conceptual, which may lead to inconsistencies and confusion. The loss in the OCI is not identifiable. The Committee recommended staff should adopt a more pragmatic solution. The change in net assets is a measure of performance of an investor and therefore should be measured. The Committee found the previous interpretation was better and more conceptual as it addressed different types of transactions that should be accounted for in the appropriate way by investors (which may be different). The share of net assets may be different in accordance with different circumstances, and therefore to recognise that in the investor’s OCI was inappropriate. The Committee recommended that staff revisit the issues and resubmit it to the Committee.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.