Investments in Joint Ventures – Overview

An entity with joint control of an investee shall account for its investment in a joint venture using the equity method except when that investment qualifies for exemption in IAS 28.

The exemptions include: IAS 28 Investments in Joint Ventures – Overview

  • if the entity is a parent that is exempt from preparing consolidated financial statements by the scope exception in paragraphs 4(a) of IFRS 10 Consolidated Financial Statements; or
  • all of the following apply:
    1. the entity is a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the entity not applying the equity method;
    2. the entity’s debt or
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Investments in Associates – Highlights

Just as a starter, two definitions!

Associate: An entity, including an unincorporated entity such as a partnership, over which an investor has significant influence and which is neither a subsidiary nor an interest in a joint venture.

Significant influence: The power to participate in the financial and operating policy decisions of the investee but it is not control or joint control over those policies.… Read more

Interest-free term loan – No bank debt

Parent A advances an unsecured loan for €1m to Subsidiary B on 1 January 2018 with the following terms:

  • 0% interest (assume that a market rate of interest for a similar loan is estimated at 7%);
  • €1m repayable in 5 years – December 2022.

Initial recognition of an interest-free term loan Interest-free term loan – No bank debt

IFRS 9 contains the same initial recognition requirements for financial assets as IAS 39. This means that, in contrast to demand loans, there are specific requirements which state that the initial fair value of an interest-free term loan is equal to the present value of future cash receipts discounted at an appropriate market rate of interest for a similar loan at that Read more

IFRS 3 Redefinition of a business

In summary:IFRS 3 Redefinition of a business

  • The IASB issued narrow-scope amendments to IFRS 3 to help entities determine whether an acquired set of activities and assets is a business or not.
  • The amendments clarify the minimum requirements to be a business, remove the assessment of a market participant’s ability to replace missing elements, and narrow the definition of outputs.
  • The amendments add guidance to assess whether an acquired process is substantive and add illustrative examples.
  • The amendments introduce an optional concentration test to permit a simplified assessment.
  • The amendments are effective for annual reporting periods beginning on or after 1 January 2020 and apply prospectively. Earlier application is permitted.

Introduction IFRS 3 Redefinition of a businessRead more

IAS 34 Interim financial statements


IAS 34 prescribes the guidelines for an entity regarding the preparation of interim financial statements by providing information about the minimum contents of interim financial reports along with the recognition and measurement principles for such financial reports. These interim financial reports will provide the most recent activities, circumstances and financial affairs of the reporting entity


IAS 34 does not define, which entity is required to publish the interim financial reports, the time period after the end of interim period within which these financial reports should be published and how frequently these should be published.

  • However, International Accounting Standard Committee encourages that the entities whose instruments are publicly traded should publish its interim financial reports at least once within
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Retirement Benefit Plans

The objective of IAS 26 is to specify measurement and disclosure principles for the reports of retirement benefit plans. All plans should include in their reports a statement of changes in net assets available for benefits, a summary of significant accounting policies and a description of the plan and the effect of any changes in the plan during the period.

Retirement benefit plans are normally described as either defined contribution plans or defined benefit plans, each having their own distinctive characteristics. Occasionally plans exist that contain characteristics of both. Such hybrid plans are considered to be defined benefit plans for the purposes of IAS 26.

For defined contribution plans, the objective of reporting is to provide information about the plan Read more