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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 November 2025

The IASB met on 17 November 2025 to continue redeliberating the proposals in the Exposure Draft Equity Method of Accounting—IAS 28 Investments in Associates and Joint Ventures (revised 202x).

Measurement of the cost of an associate (Agenda Paper 13A)

The IASB tentatively decided to proceed with its proposals to require an investor or joint venturer:

  1. on obtaining significant influence or joint control:
    1. to measure the cost of an associate or a joint venture at the fair value of the consideration transferred, including the fair value of any previously held interest in the associate or joint venture; and
    2. to recognise contingent consideration as part of the consideration transferred and measure it at fair value.
  2. after obtaining significant influence or joint control:
    1. not to remeasure contingent consideration classified as an equity instrument;
    2. to measure other contingent consideration at fair value at each reporting date; and
    3. to recognise changes in fair value in profit or loss.
  3. when purchasing an additional ownership interest in an associate or joint venture—to apply the requirements described in (b).

All 11 IASB members present agreed with this decision. One member was absent.
 

The IASB also tentatively decided to define contingent consideration based on the definition set out in IFRS 3 Business Combinations.

Ten of the 11 IASB members present agreed with this decision. One member was absent.
 

Purchases of an additional ownership interest (Agenda Paper 13B)

The IASB tentatively decided to proceed with its proposal to require an investor or joint venturer, at the date of purchase of an additional ownership interest, to measure that interest at the fair value of the consideration transferred.

All 11 IASB members present agreed with this decision. One member was absent.

The IASB tentatively decided to proceed with its proposal to require an investor or joint venturer, at the date of purchase, to include in the carrying amount of the investment its additional share of the fair value of the associate’s or joint venture’s identifiable assets and liabilities.

Nine of the 11 IASB members present agreed with this decision. One member was absent.

The IASB decided to explore providing investors or joint venturers with a relief from measuring the additional share of the associate’s or joint venture’s identifiable assets and liabilities at fair value.

All 11 IASB members present agreed with this decision. One member was absent.

The IASB also tentatively decided to extend the measurement period described in paragraph 45 of IFRS 3 to when an investor obtains significant influence or joint control over an associate or joint venture or purchases an additional ownership interest in an associate or joint venture.

All 11 IASB members present agreed with this decision. One member was absent.
 

Disposal of a portion of an investment in an associate (Agenda Paper 13C)

The IASB tentatively decided to proceed with its proposals to require an investor or joint venturer disposing of a portion of an investment:

  1. to measure the disposed portion as a percentage of the carrying amount of the investment (calculated as the disposed ownership interest divided by the total ownership interest); and
  2. to recognise the difference between the consideration received and the portion derecognised as a gain or loss in profit or loss.

Nine of the 11 IASB members present agreed with these decisions. One member was absent.

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