The IASB discussed the proposed amendments to IFRS 10 Consolidated Financial Statements arising from the exposure draft published in December 2011. On the basis of the comments received from respondents, the Board tentatively decided to finalise the following amendments:
- Add a definition of the date of initial application to IFRS 10. This would be 'the beginning of the reporting period in which IFRS 10 is applied for the first time';
- Clarify that an entity is not required to make adjustments to the accounting for its involvement with an entity that was disposed of in the comparative period(s); and
- Paragraphs C4—C5 of IFRS 10 are amended to clarify how the investor shall retrospectively adjust comparative periods when the consolidation conclusion changes between IAS 27 Consolidated and Separate Financial Statements/SIC-12 Consolidation-Special Purpose Entities and IFRS 10. The amendments to paragraph C4 will also clarify that when an investor concludes that it shall consolidate an investee that was not previously consolidated, and control was obtained before the effective date of the 2008 revisions to IFRS 3 Business Combinations and IAS 27, an entity can apply either the revised versions of those standards or the versions issued in 2004.
Thirteen Board members agreed and one was absent.
The Board also discussed whether similar transition relief should be provided for first-time adopters of IFRS. It was noted that the issues raised regarding retrospective application were not specific to IFRS 10 and should be considered more comprehensively. The Board asked the staff to examine the issue for future consideration by the Board.
The Board also tentatively decided to provide additional transition relief in IFRS 10, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities:
- to limit the requirement to provide adjusted comparative information to only the preceding comparative period; nevertheless, presentation, in addition, of earlier adjusted comparative periods is not prohibited. If earlier comparative information is not restated, it should be made clear on the face of the financial statements that the earlier periods have not been adjusted. (Twelve Board members agreed); and
- for the first year that IFRS 12 is applied, to remove the requirement to present comparative information for the disclosures related to unconsolidated structured entities. All Board members agreed.
The Board asked the staff to prepare a ballot draft reflecting the decisions made at the meeting.