The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) Equity Method project, which aims to develop answers to application questions about the equity method, as set out in International Accounting Standard (IAS) 28 Investments in Associates and Joint Ventures, using the principles derived from IAS 28.
With this project, the IASB’s objective is not to change the basis for the recognition of investments in associates and joint ventures or replace the equity method with another method of accounting. Rather, the IASB is proposing amendments to the existing IAS 28 aimed at reducing diversity in practice by answering application questions about the equity method of accounting.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian generally accepted accounting principles in accordance with the AcSB’s strategy of adopting IFRS Accounting Standards for publicly accountable enterprises.