Practical Guide To IFRS 10 - Investment entities: Exception To Consolidation

At a glance

Many funds and similar entities will be exempted from consolidating controlled investees under amendments to IFRS 10, 'Consolidated financial statements'. This is a result of the IASB issuing amendments to IFRS 10, IFRS 12, 'Disclosure of interests in other entities' and IAS 27, 'Separate financial statements', on 31 October 2012. These amendments will particularly benefit funds, as those that qualify will be able to fair value controlled investments, rather than having to consolidate them.

The guidance applies to an 'investment entity'. The amendment to IFRS 10 defines an investment entity and introduces an exception to consolidation. The amendments to IFRS 12 introduce disclosures that an investment entity needs to make.