IASB issued new standard IFRS 18
On 9 April 2024, the International Accounting Standards Board (IASB) published its new standard IFRS 18 Presentation and Disclosures in Financial Statements that will replace IAS 1 Presentation of Financial Sta…
Amendments to IAS 28 endorsed for use in the EU
On 8 February 2019, Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures were endorsed by the European Commission for use in the European Union. The EU effective date is the same as the IASB’s effective date (annual periods beginning on or after 1 January 2019). Earlier adoption of Amendments to IAS 28 is permitted.
Amendments to IAS 28 were issued in October 2017. We informed you in detail about the new standard in the Accounting News in November 2017. In today’s article, we will summarise key changes arising from Amendments to IAS 28.
Background
IFRS 9 Financial Instruments excludes from its scope interests in associates and joint ventures accounted for in accordance with IAS 28 Investments in Associates and Joint Ventures. There was uncertainty in practice about whether IFRS 9 applies to an entity’s long-term interests in an associate or joint venture to which the equity method is not applied but that form part of the entity’s net investment in the investee (‘long-term interests’). Such long-term interests include long-term loans for which settlement is neither planned nor likely to occur in the foreseeable future.
Changes
The amendment to IAS 28 clarifies that IFRS 9, including its impairment requirements, applies to long-term interests. Furthermore, in applying IFRS 9 to long-term interests, an entity does not take into account adjustments to their carrying amount required by IAS 28 (i.e., adjustments to the carrying amount of long-term interests arising from the allocation of losses of the investee or assessment of impairment in accordance with IAS 28).
The amendments are accompanied by an illustrative example.
Effective date and transition
The amendments are effective in the EU for periods beginning on or after 1 January 2019. The amendments are to be applied retrospectively. Earlier application is permitted.
Source: www.iasplus.com
The article is part of dReport – March 2019, Accounting news.
