IAS 28 Reciprocal interests

Date recorded:


The IFRIC considered circumstances in which A owns an interest in B, and B concurrently owns an interest in A. Those investments are known as reciprocal interests (or ‘cross-holdings’).  The IFRIC discussed whether it should provide guidance as to the appropriate accounting:

(a) when the cross-holdings are accounted for using the equity method under IAS 28 Accounting for Investments in Associates (considered in August 2002)

(b) when a control relationship exists, and holdings are accounted for under IAS 27 Consolidated and Separate Financial Statements (considered in April 2003)


Decision not to add

August 2002



Regarding (a), in August 2002 the IFRIC agreed not to require publication of an Interpretation on this issue because paragraph 20 of IAS 28 (revised 2003) requires elimination of reciprocal interests (through application of consolidation concepts).

Regarding (b), the IFRIC decided to wait until the amendments to improve IAS 27 are finalised (as part of the Business Combinations Phase II project) before considering whether to take this issue onto the agenda.

The IFRIC is expected to reconsider these issues once the Business Combinations Phase II project is finalised, as expected in 2005.


IFRIC reference: IAS 28

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