07/09/2015 - EFRAG's draft comment letter on the IASB's Exposure Draft ED/2015/7 Effective Date of Amendments to IFRS 10 and IAS 28
On 10 August 2015, the IASB issued Exposure Draft Effective Date of Amendments to IFRS 10 and IAS 28 ("the ED"). The ED proposes deferring indefinitely the effective date of the amendments to IFRS 10 and IAS 28, issued in September 2014, on Sale or Contribution of Assets between an Investor and its Associate or Joint Venture ("the 2014 Amendments").
The publication of the ED results from the IASB's decision in June 2015 that its ongoing research project Equity Method of Accounting should take over all the issues currently being considered by the Interpretations Committee on IAS 28 Investments in Associates and Joint Ventures, including the resolution of internal inconsistencies that were identified by EFRAG on the 2014 Amendments.
In its draft comment letter, EFRAG agrees with the IASB's proposal to defer indefinitely the effective date of the 2014 Amendments. EFRAG considers that this deferral will give the IASB the opportunity to address the application problems arising from the equity method requirements set out in IAS 28 in a comprehensive way and in a single project. It would also give the IASB the opportunity to reconsider the issues and challenges identified by EFRAG during its consultative phase.
Finally, EFRAG considers that deferring the effective date of the 2014 Amendments indefinitely would also reduce the risk of requiring successive rounds of changes to IAS 28 in a short period of time.