The International Accounting Standards Board (IASB) has published for comment ED/2013/10 an Exposure Draft of proposed amendments to IAS 27. The proposed amendments to IAS 27 would allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate (parent only) financial statements.
Prior to the revision in 2003 of IAS 27 Consolidated and Separate Financial Statements and IAS 28 Investments in Associates, the equity method was one of the options available to an entity to account for investments in subsidiaries and associates in the entity’s separate financial statements. In 2003, the equity method was removed from the options.
Following feedback from constituents on the IASB’s 2011 Agenda Consultation, the IASB has published this ED of proposed amendments to IAS 27 to restore the option to use the equity method to account for investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements.
The IASB expects the proposed change will reduce compliance costs for many entities, while providing information helpful to an assessment of the investor’s net assets and profit or loss.
Click here for IASB Exposure Draft ED/2013/10.
Comments are due to the NZASB by 31 January 2014 and to the IASB by 3 February 2014
Comments, both formal and informal, can be made to the New Zealand Accounting Standards Board (NZASB) addressed to the Chief Executive, External Reporting Board, PO Box 11250, Manners Street Central, Wellington 6142, or by email to firstname.lastname@example.org. Comments can also be made electronically to the IASB through its website (www.ifrs.org), using the ‘Comment on a proposal’ page located via the ‘Get Involved’ tab The NZASB would appreciate copies of submissions made directly to the IASB.
It would be appreciated if respondents send their comments in electronic form (PDF and Microsoft Word formats) as it allows for efficient collation and analysis of comments. All comments will ultimately be posted on the XRB website unless respondents indicate that they wish their comments to remain confidential.