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On 19 September 2024 the International Accounting Standards Board (IASB) published the Exposure Draft Equity Method of Accounting—IAS 28 Investments in Associates and Joint Ventures (revised 202x). The Exposure Draft sets out:

  • proposed amendments to IAS 28 to answer application questions about how to apply the equity method of accounting; and
  • proposals to improve the disclosure requirements in IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements to complement the proposed amendments to IAS 28.

As part of the IASB’s work to improve the understandability of IFRS Accounting Standards, the IASB is proposing to re-order the requirements in IAS 28 in a more logical and consistent way. A copy of IAS 28 (revised 202x), as set out in the Exposure Draft, marked-up against the current version of IAS 28, is available.

The comment period closed on 20 January 2025.

At its May 2025 meeting, the IASB discussed a summary of the feedback from comment letters and from outreach activities on its Exposure Draft. The IASB was not asked to make any decisions.

IASB® Update April 2026

The IASB met on 22 April 2026 to continue redeliberating the proposals in the Exposure Draft Equity Method of Accounting—IAS 28 Investments in Associates and Joint Ventures (revised 202x).

Cost of an associate—Other matters (Agenda Paper 13A)

The IASB tentatively decided to confirm the proposal to include in the carrying amount of the investment the deferred tax effects related to adjusting the investor’s share of the associate’s identifiable assets and liabilities to fair value.

All 13 IASB members agreed with this decision.

The IASB tentatively decided to clarify that, when an investor issues equity or debt instruments to obtain significant influence, it is required to account for the costs to issue the debt or equity instrument in accordance with IAS 32 Financial Instruments: Presentation and IFRS 9 Financial Instruments.

All 13 IASB members agreed with this decision.

The IASB tentatively decided not to add a requirement that, before recognising a gain on a bargain purchase, an investor would:

  1. reassess whether it has correctly identified all the assets and liabilities of the associate; and
  2. review the procedures used to measure the fair value of the share of the associate’s identifiable assets and liabilities.

Twelve of 13 IASB members agreed with this decision.

Purchases of additional ownership interests—Other matters (Agenda Paper 13B)

The IASB tentatively decided to confirm the proposal to require an investor to recognise a bargain purchase gain from the purchase of an additional ownership interest in profit or loss.

All 13 IASB members agreed with this decision.

The IASB tentatively decided to confirm the proposal that an investor that has reduced the carrying amount of the investment to nil is not required to immediately recognise losses not recognised on its previously held investment when it purchases an additional ownership interest.

All 13 IASB members agreed with this decision.

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