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29/09/2011 | EFRAG's draft comment letter on the IASB's ED Investment Entities

EFRAG has issued its draft comment letter on the IASB's ED Investment Entities. The letter can be downloaded here. Comments are invited on the letter by 27 December 2011.

In August 2011 the IASB issued the Exposure Draft Investment Entities (the ED). The ED provides criteria and guidance to determine whether an entity is an investment entity. In accordance with the ED, investment entities are required to measure their investments in controlled entities at fair value through profit or loss in accordance with IFRS 9 Financial Instruments.

 

While we broadly welcome the proposal in the Exposure Draft, EFRAG wishes to emphasise that, in its view, the parent of an investment entity should be permitted to retain the fair value accounting that is applied by its investment entity subsidiary to controlled entities. EFRAG also encourages IASB to carry out an impact assessment to better understand better the practical implications of any amendments to IAS 28.

 

The Draft Comment Letter asks constituents to comment on whether the criteria for identifying investments entities are appropriate and whether the exception from the requirement to consolidate should be applied at an entity level or at the level of individual investments.

 

The draft comment letter can be downloaded below. For a presentation of EFRAG's preliminary position please click here.
Document : EFRAG_DCL_IASB_Exposure_Draft_Investment_Entities.pdf
Linked Project : click here

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