EFRAG in its comment letter appreciates the IASB’s efforts to clarify the requirements of IFRS 10 Consolidated Financial Statements and IAS 28Investments in Associates and Joint Ventures. EFRAG does not however support all proposals. EFRAG in particular:
- supports the IASB’s proposal to extend the exception from preparing consolidated financial statements to subsidiaries of investment entities;
- disagrees with the IASB’s proposal to limit the situations where an investment entity parent should consolidate a subsidiary to those subsidiaries that are not investment entities and raises concerns that the application of the proposals may result in an inappropriate accounting outcome for some investing structures and in a possible loss of relevant information;
- considers that fair value measurement of an investment entity’s investments provides the most useful information and should be retained by a non-investment entity investor when applying the equity method to its investment entity investees regardless of whether the investee is an associate or a joint venture.