The Board continued its deliberations on the proposals in the exposure draft ED 9 Joint Arrangements. The Board discussed the scope and loss of joint control sections for the IFRS.
The Board tentatively decided to modify the scope paragraph of ED 9 to state that the IFRS should be applied by all entities in accounting for interests in joint arrangements. The requirement for venture capital organisations or mutual funds, unit trusts and similar entities including investment-linked insurance funds that upon initial recognition are designated as at fair value through profit or loss to measure their investment at fair value in accordance with IFRS 9 or IAS 39 will be placed in the measurement section of the new IFRS. In addition, the Board tentatively agreed to amend the scope paragraph in IAS 28 Investments in Associates as a consequential amendment in the IFRS to align IAS 28 with the decisions described above.
Loss of Joint Control
The Board tentatively decided to remove all descriptions that associate loss of joint control and loss of significant influence in existing IFRSs with the term 'significant economic event'. The Board tentatively decided to retain this term for the event of loss of control.
In addition, the Board tentatively decided to:
- to confirm that the requirements for the loss of joint control proposed in ED 9 would be carried into the IFRS.
- to amend IAS 21 The Effects of Changes in Foreign Exchange Rates to treat the loss of joint control over a joint venture that includes a foreign operation but in which the investor retains significant influence as a partial disposal instead of a disposal.
The Board will continue its deliberation of this project at a future meeting.