Global Standards for the world economy

Tuesday 30 May 2017

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IFRS 10 and IAS 28 (2011)

Meeting summaries and observer notes

 IFRS IC January 2012


The Interpretations Committee received a request to clarify whether a business meets the definition of a ‘non-monetary asset’. The question was asked in the context of identifying whether the requirements of SIC-13 Jointly Controlled Entities Non-Monetary Contributions by Venturers and IAS 28 Investments in Associates and Joint Ventures (revised in 2011) apply where a business is contributed to:

  • a jointly controlled entity (JCE) as defined in IAS 31 Interests in Joint Ventures; or to:
  • a joint venture (JV) as defined in IFRS 11 Joint Arrangements; or to:
  • an associate

in exchange for an equity interest in that JCE/JV or associate.

The Committee noted that this matter is related to the issues arising from the acknowledged inconsistency between the requirements in IAS 27 Consolidated and Separate Financial Statements and SIC-13, in dealing with the loss of control of a subsidiary that is contributed to a JCE/JV or an associate. In its May 2011 IFRIC Update, the Committee noted that there are broader issues in relation to contributions to a JCE/JV or associate in general, and it therefore concluded that this matter would be best resolved by referring it to the Board as part of a broader project on equity accounting. The Committee acknowledges that this new submission proposes an alternative way of considering the matter but it continues to think that the best course of action would be to consider the matter as part of a broader Board project.

The Committee acknowledged, however, that the potential timing for the broader project is uncertain and so decided to ask the Board whether it wants the Committee to consider further the inconsistency between the requirements in IAS 27 and those in SIC 13. The Committee directed the staff to perform further preliminary analysis of what might be the ways in which the Board could address this matter and resolve the inconsistency noted. The staff will present the results of this analysis at the next meeting, so that the Committee can review them before it liaises with the Board.
Committee outstanding issues update

The Committee received a report on two new issues for consideration at a future meeting and on one outstanding issue. In addition to these three issues, the Committee was informed of two further issues that the staff expect to bring to a future meeting:

  • in the context of rate-regulated activities, whether the customer base within a single regulatory regime could be considered as a single unit of account and whether, as a result, this could lead to the recognition of regulatory assets and liabilities; and
  • how land use rights, including the right to cultivate or the right to build, should be accounted for; for example, as property plant and equipment, as an intangible asset, or as a leased asset in a lease agreement.

With the exception of those issues, all requests received and considered by the staff were discussed at this meeting.


Date: 1/17/2012