Prior to the revision in 2003 of IAS 27 Consolidated and Separate Financial Statements and IAS 28 Investments in Associates, the equity method was one of the options available to an entity to account for investments in subsidiaries and associates in the entity’s separate financial statements. In 2003, the equity method was removed from the options.
IAS 27 Separate Financial Statements allows an entity to account for investments in subsidiaries, joint ventures and associates either at cost or in accordance with IFRS 9, Financial Instruments in the entity’s separate financial statements.
The IASB has published this ED of proposed amendments to IAS 27 to restore the option to use the equity method to account for investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements.
The proposed amendments to IAS 27 would allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate (parent only) financial statements.
The IASB expects the proposed change will reduce compliance costs for many entities, while providing information helpful to an assessment of the investor’s net assets and profit or loss.
Press release
Exposure Draft ED/2013/10
© IASB - International Accounting Standards Board
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