• Service: Audit, IFRS
  • Type: Business and industry issue
  • Date: 8/13/2014

Wider use of equity method in separate financial statements 

In some countries, local regulations require companies to present separate financial statements using the equity method to account for investments in subsidiaries, associates and joint ventures. However, IFRS does not currently permit this.

In response to requests from constituents, the IASB has issued amendments to IAS 27 Separate Financial Statements to allow equity accounting for investments – not only in associates and joint ventures, but also in subsidiaries. This may lead to more companies applying IFRS in their separate financial statements, but is also likely to increase diversity in reporting practice.

The amendments apply retrospectively for annual periods beginning on or after 1 January 2016. Early adoption is permitted.

Equity method in separate financial statements (2014/14)

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This In the Headlines looks at amendments issued by the IASB to allow equity accounting in separate financial statements under IFRS.

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