Sweep issues for Joint Arrangements - Clarification of the partial use of fair value at the group level for an investment in an associate
At its meeting in February, the Board decided that one of the annual improvements that it was finalising would be better dealt with, not as an annual improvement, but instead by amending IAS 28 Investments in Associates as part of the Joint Arrangements project. That amendment confirmed that an entity could continue to use fair value to measure part of an investment in an associate held by a subsidiary, if that subsidiary used the scope exception in IAS 28 to measure its investment at fair value through profit or loss. The exception would, in making the change, be recharacterised as a measurement exemption.
At this meeting the Board tentatively decided that the measurement exception could be applied even if the investment held by the qualifying subsidiary (which would be a venture capital organisation or mutual fund, unit trust or similar entity including an investment-linked insurance fund) was not an associate of that subsidiary.