Tuesday 11 March 2014
The objective of this narrow-scope project is to restore the option to use the equity method of accounting in separate financial statements.
When an entity prepares separate financial statements it has the choice of measuring investments in subsidiaries, joint ventures and associates at cost or at fair value. Corporate law in some countries requires listed entities to present separate financial statements using the equity method of accounting to measure these investments.
Consequently, entities in those countries must currently prepare two sets of financial statements. There was strong support from stakeholders in those countries affected, particularly from Latin America, for us to address this issue. Until 2005 the option of using the equity method to measure such investments was permitted-it had been removed as part of the IASB's improvements project, in 2005, to reduce the number of options available.
We understand that allowing this option would probably reduce compliance costs without a loss of information.
At its May 2013 meeting, the IASB tentatively decided to amend paragraph 10 of IAS 27 Separate Financial Statements to allow an entity to account for investments in subsidiaries, associates and joint ventures using the equity method in their separate financial statements.
IASB publishes proposals for narrow-scope amendments to IAS 27 Separate Financial Statements
The IASB tentatively decided to allow the use of the equity method of accounting in separate financial statements
The IASB add to its agenda a narrow-scope project to restore the option to use the equity method of accounting in separate financial statements
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