Global Standards for the world economy

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IFRS 10 and IAS 28 (2011)

Meeting summaries and observer notes

 IFRS IC March 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.

At the January 2012 meeting, 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. The Committee directed the staff to perform further preliminary analysis of what might be the ways in which the Board could address this matter.
At the March 2012 meeting, the Committee discussed various alternatives that would address the inconsistency noted. With regard to a business that is contributed to a JCE/JV or associate, the Committee expressed support for a full gain recognition on the loss of control of the business (whether the business is housed in a legal entity or not).
The Committee decided to ask the Board whether it wants the Committee to consider further how to resolve the inconsistency between the requirements in IAS 27 and those in SIC-13 on the basis of the different alternatives discussed.
The Committee also decided to inform the Board that the Committee had not considered the related issue of contributions to joint operations as defined in IFRS 11 and the Committee was therefore not making any recommendations on that issue.



Date: 3/13/2012