EFRAG requests comments on its draft endorsement advice on Amendments to IAS 28

15 December 2017

EFRAG has issued a draft endorsement advice letter and a separate invitation to comment relating to the endorsement for use in the EU of Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28).

The objective of the Amendments is to clarify that IFRS 9 Financial Instruments applies to financial instruments in associates or joint ventures to which the equity method is not applied. These include long-term interests that, in substance, form part of the entity’s net investment in an associate or joint venture (‘long-term interests’). The Amendments also clarify that:

• an entity applies the requirements in IFRS 9 to long-term interests before applying the loss allocation and impairment requirements in IAS 28 Investments in Associates and Joint Ventures; and
• in applying IFRS 9, the entity does not take account of any adjustments to the carrying amount of long-term interests that previously arose from the loss allocation or impairment requirements of IAS 28.

The Amendments become effective for annual periods beginning on or after 1 January 2019, with earlier application permitted.

EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore recommends their endorsement. EFRAG is seeking comments on all aspects of its analyses supporting its preliminary conclusions. Comments are requested by 16 February 2018. 

Full press release

Full draft endorsement advice letter

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