EFRAG issues feedback statement on its research paper on its 'Short Discussion Series' paper on the the equity method
10 Sep 2014
In January 2014, EFRAG, launched its 'Short Discussion Series' by issuing 'The Equity Method: a measurement basis or one-line consolidation?' A feedback statement with a summary of the comments received from the respondents is now available.
The paper was intended to assist the IASB's work and stimulate debate within Europe in relation to the equity method of accounting. It considered to what extent the equity method in IAS 28 Investments in Associates and Joint Ventures (2011) is a measurement basis, a one-line consolidation or a combination of both.
Responses to the paper (nine in all, five of these from national standard-setters) revealed a diversity of views, indicating that there is no common understanding of the purpose or use of the equity method. What became clear, however, was that a view of the equity method as solely an entity perspective one-line consolidation was not considered appropriate given current conceptual thinking and developments in financial reporting.
Please click for the following information on the EFRAG website:
