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15/12/2017 - EFRAG requests comments on its draft endorsement advice on Amendments to IAS 28

​EFRAG is consulting on both its assessment of the Amendments against the techincal criteria in the EU and on its assessment of whether the Amendments are conducive to the European public good. Comments are requested by 16 February 2018.

​EFRAG has issued a draft endorsement advice letter and a separate invitation to comment relating to the endorsement for use in the EU of Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) ('the Amendments').

The objective of the Amendments is to clarify that IFRS 9 Financial Instruments applies to financial instruments in associates or joint ventures to which the equity method is not applied. These include long-term interests that, in substance, form part of the entity’s net investment in an associate or joint venture (‘long-term interests’). The Amendments also clarify that:

  • an entity applies the requirements in IFRS 9 to long-term interests before applying the loss allocation and impairment requirements in IAS 28 Investments in Associates and Joint Ventures; and
  • in applying IFRS 9, the entity does not take account of any adjustments to the carrying amount of long-term interests that previously arose from the loss allocation or impairment requirements of IAS 28.

The Amendments become effective for annual periods beginning on or after 1 January 2019, with earlier application permitted.

EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore recommends their endorsement. EFRAG is seeking comments on all aspects of its analyses supporting its preliminary conclusions. The draft endorsement advice letter can be found here and the invitation to comment in a web form here. If you wish to download a word version of the invitation to comment, please click here.

Comments are requested by 16 February 2018. You can comment on EFRAG’s draft endorsement advice by clicking on the ‘Comment publication’ link below. EFRAG has also updated its Endorsement Status Report, which can be downloaded here on EFRAG's web page.