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Common control transactions
Equity method of accounting
Extractive activities — Comprehensive project
Financial instruments with characteristics of equity
Financial reporting in high inflationary economies
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XBRL — eXtensible Business Reporting Language
Equity method of accounting
Background
Constituent feedback in the IASB' Agenda consultation 2011 revealed a level of criticism of the equity
method of accounting.

Concerns raised by constituents include:

whether the information provided by the equity method is useful to users

complexities and inconsistencies with other IFRS requirements, e.g. goodwill impairment, share-based
payments and joint arrangements.
IAS 28 Investments in Associates and Joint Ventures (2011) defines the equity method as follows:

The equity method is a method of accounting whereby the investment is initially recognised at cost and
adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets. The
investor's profit or loss includes its share of the investee's profit or loss and the investor's other compre-
hensive income includes its share of the investee's other comprehensive income.

This research project is designed to undertake a fundamental assessment of the equity method of
accounting in terms of usefulness to investors and difficulties for preparers.

Current status of the project

In December 2012, as part of its response to the Agenda consultation 2011, the IASB formally added this
project to its work programme as an IASB-only research project. Board discussions are expected in the
fourth quarter of 2014 and first half of 2015.

Project milestones
Date Development Comments
December 2012 Added to the IASB work programme as a research project

Related Discussions
Equity Method
26 Oct 2021 In this session, the Board discussed the direction of the project and next steps.
Equity method
22 Jun 2021 In this session, the Board discussed the principles identified in the analysis of IAS 28.
Equity method of accounting
23 Mar 2021 In this session, the IASB was provided with an update on the research project.
Equity method of accounting
27 Oct 2020 In this session, the Board discussed application problems within IAS 28.
Research programme
15 Dec 2015 In this session, the Director of Research informed the IASB about changes to the research
programme since the last update in September 2015.
IFRS implementation issues — IFRIC update
19 Nov 2015 The regular update summary paper on the most recent IFRS Interpretations Committee
meeting was discussed with the board. Major topics included IFRS 2 and classification and measurement
of share-based payment transactions and the deferral of the effective date of the September 2014
amendment to IFRS 10 and IAS 28.
Equity method
24 Jun 2015 The Board discussed a staff proposal to undertake a limited scope research project to address
equity accounting requirements for Investments in Associates and Joint Ventures. The Board approved
the staff recommendation which also included setting aside the application of the equity method for
investment in subsidiaries in separate financial statements.
Research update
18 Mar 2015 The Board reviewed projects on the research agenda, including the scope and timing.
Research programme
23 Jul 2014 The Board was presented a paper setting out how the IASB should prioritise the projects in
the research programme.
Equity method of accounting — Research project
21 May 2014 The staff presented the first agenda paper on the Equity method of accounting research
project. The Board discussed various issues around the scope of the project. It was concluded that the
scope should be narrow as a majority of the Board members did not see a problem with the equity
method.
Equity method in separate financial statements
21 Mar 2014 The Board received a summary of the feedback received on its Exposure Draft ED/2013/10
'Equity Method in Separate Financial Statements', which had been published in December 2013. No
decisions were made.
All Related
Quick links
IAS 28 'Investments in Associates and Joint Ventures'
Related news
Updated IASB work plan — Analysis (January 2022)
28 Jan 2022

Updated IASB work plan — Analysis (November 2021)

23 Nov 2021

ASBJ paper on the equity method of accounting

03 Sep 2021

Summary of the December 2015 ASAF meeting now available

22 Jan 2016

IASB defers the effective date of September 2014 amendments to IFRS 10 and IAS 28
17 Dec 2015
Summary of the October ASAF meeting now available
29 Oct 2015

All Related
Related Publications
IFRS in Focus — IASB defers effective date of amendment 'Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture' Image
IFRS in Focus — IASB defers effective date of amendment 'Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture'
18 Dec 2015

17-december Image
EFRAG endorsement status report 17 December 2015
17 Dec 2015

Deloitte comment letter on IASB ED/2015/7 'Effective Date of Amendments to IFRS 10 and IAS 28'
Image
Deloitte comment letter on IASB ED/2015/7 'Effective Date of Amendments to IFRS 10 and IAS 28'
06 Oct 2015

ifrs 10 ias 28 amendment deferral Image

IFRS in Focus — IASB proposes to defer effective date of amendment 'Sale of Contribution of Assets
between an Investor and its Associate or Joint Venture'
11 Aug 2015

All Related
Related Standards
IAS 28 — Investments in Associates and Joint Ventures (2011)
All Related
Related Projects
Agenda consultation 2011
All Related
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