08 September 2011

IASB: Effect analysis for IFRS 10 and IFRS 11

The IASB issued the effect analysis for IFRS 10 'Consolidated Financial Statements', which also includes the effect analysis for IFRS 12 'Disclosure of Interests in Other Entities', and the effect analysis IFRS 11 'Joint Arrangements'.

The effect analyses provide detailed insights into the potential impacts of the new requirements using case studies and other quantitative and qualitative material.

The document 'Effect analysis' aims to provide the reader with an analysis of the effects of IFRS 10 'Consolidated Financial Statements' and IFRS 12 'Disclosure of Interests in Other Entities'. The IASB has carried out this analysis by identifying typical scenarios to highlight those areas where it expects the most significant effects from applying IFRS 10 and IFRS 12 as compared to IAS 27 'Consolidated and Separate Financial Statements' and SIC-12 'Consolidation—Special Purpose Entities'.

The IASB considered the various effects that the new requirements will have on the entities that will need to implement them (e.g. effects on financial statements, cost and benefits arising from the implementation of the new pronouncement and the degree of convergence that the new requirements achieve with US GAAP).

When undertaking the effect analysis of IFRS 11, IASB's analysis has considered the following aspects:

Joint venture activity overview

(a) Joint venture activity for the period 1990-2010.

(b) Incidence of joint ventures by country.

(c) Incidence of joint ventures by industry.

(d) Joint venture structures.

Financial statement effects

(a) Accounting methods used by different jurisdictions.

(b) The effects of IFRS 11 on the accounting of current and new joint arrangements and on entities’ main financial ratios.

(c) Backing up our assessments: outreach activities.

Cost-benefit analysis (CBA)

(a) Classification of the types of joint arrangement.

(b) Transition provisions.

(c) Additional disclosures.

Convergence with US GAAP

(a) Differences in the definitions of ‘joint arrangement’ and ‘joint control’.

(b) Differences between US GAAP and IFRS 11.

Press release

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