Investment Entities: Some Proposed Clarifications

The IASB has issued Investment Entities: Applying the Consolidation Exception, an exposure draft of proposed amendments to IFRS 10 and IAS 28, with comments to be received by September 15, 2014. The exposure draft reflects issues that have arisen in applying the IASB's important conclusion, effective since the beginning of 2014, that an investment entity doesn't consolidate its subsidiaries or apply IFRS 3 when it obtains control of another entity; instead, such an entity measures an investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9.

The investment entity exception is of course vitally important to that industry and was crucial in allowing the Canadian Securities Administrators to conclude that investment entities could and should make the transition to reporting under IFRS, several years after most other publicly-accountable entities. The highly specific issues addressed in the exposure draft, flowing from questions originally