AASB issues investment entity exposure draft

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11 Sep 2011

The Australian Accounting Standards Board (AASB) has issued ED 220 Investment Entities which incorporates the IASB's Exposure Draft ED/2011/4 Investment Entities.

The proposals outline criteria for identifying an 'investment entity' and how such an entity would measure its investments. More information about the proposals can be found in our IFRS in Focus Newsletter (PDF 88k).

The Exposure Draft notes the AASB has significant concerns with the proposals in IASB ED/2011/4. In particular, the AASB is concerned about the absence of a conceptual underpinning for the proposals and their rules-based nature. In addition, the AASB notes the proposals would, for example, be likely to prevent the application by insurers of fair value through profit or loss measurement to their investees under AASB 1023 General Insurance Contracts and AASB 1023 Life Insurance Contracts.

The Exposure Draft also notes the nature of the proposed disclosures in ED/2011/4 and the AASB believes, in the context of the overall project, that it would not be appropriate to reduce those disclosures in respect of general purpose financial statements of Tier 2 entities applying 'Reduced Disclosure Requirements' (RDR). The AASB is therefore not proposing any relief from the disclosure requirements outlined in IASB ED/2010/4.

Comments are due to the AASB by the 30 November 2011 and to the IASB by 5 January 2012.

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