The Accounting Regulatory Committee has approved amendments to IAS 28 through a written procedure, addressing stakeholder concerns over financial classification under IFRS 18.
Resolving Classification Issues Under IAS 28 and IFRS 18
The Accounting Regulatory Committee (ARC) voted by written procedure to support the Amendments to the Fair Value Option for Investments in Associates and Joint Ventures under IAS 28.
The decision responds to stakeholder feedback concerning inconsistent interpretations of the phrase ‘similar entities’ in paragraphs 18 and 19 of IAS 28. Clarifying this language addresses the classification alignment between operating and investing categories mandated by IFRS 18 Presentation and Disclosure in Financial Statements.
Next Steps and Implementation Timeline
Following the vote, EFRAG updated its Endorsement Status Report to reflect the endorsement milestone.
The European Commission will submit the amendments to the European Parliament and the Council of the EU for a three-month scrutiny period. The amendments take effect when an organisation first applies IFRS 18, starting from 1 January 2027, with early adoption permitted.
Frequently Asked Questions
What issues do the IAS 28 amendments address?
The amendments clarify divergent interpretations of the term ‘similar entities’ in paragraphs 18 and 19 of IAS 28, helping resolve classification issues between operating and investing categories under IFRS 18.
When do the IAS 28 amendments come into effect?
The amendments apply when an entity first adopts IFRS 18, starting 1 January 2027, with earlier application permitted.
