The IFRS Interpretations Committee received a request to clarify the accounting for a transaction between a joint venturer (an entity) and its joint venture. The request describes a circumstance in which the amount of gains to eliminate in a ‘downstream’ transaction in accordance with paragraph 28 of IAS 28 exceeds the amount of the entity’s interest in the joint venture. Specifically, the submitter requested that the Interpretations Committee should clarify whether:
- the gain from the transaction should be eliminated only to the extent that it does not exceed the carrying amount of the entity’s interest in the joint venture; or
- b.the remaining gain in excess of the carrying amount of the entity’s interest in the joint venture should also be eliminated and if so, what it should be eliminated against.
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