Commission Regulation (EC) No 69/2009Show full title

AMENDMENTS TO IFRS 1 FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS AND IAS 27 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS COST OF AN INVESTMENT IN A SUBSIDIARY, JOINTLY CONTROLLED ENTITY OR ASSOCIATE

Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards

After paragraph 13(e), paragraph 13(ea) is added. After paragraph 23, a heading and paragraphs 23A and 23B are added. Paragraphs 25A and 34C are amended. After paragraph 44, a heading and paragraph 44A are added. After paragraph 47J, paragraph 47K is added.

RECOGNITION AND MEASUREMENT

Exemptions from other IFRSs

13 An entity may elect to use one or more of the following exemptions:

(a)

…

(ea)

investments in subsidiaries, jointly controlled entities and associates (paragraphs 23A and 23B);

(f)

…

Investments in subsidiaries, jointly controlled entities and associates

23A When an entity prepares separate financial statements, IAS 27 Consolidated and Separate Financial Statements requires it to account for its investments in subsidiaries, jointly controlled entities and associates either:

(a)

at cost or

(b)

in accordance with IAS 39 Financial Instruments: Recognition and Measurement.

23B If a first-time adopter measures such an investment at cost in accordance with paragraph 23A(a), it shall measure that investment at one of the following amounts in its separate opening IFRS statement of financial position:

(a)

cost determined in accordance with IAS 27 or

(b)

deemed cost. The deemed cost of such an investment shall be its:

(i)

fair value (determined in accordance with IAS 39) at the entity’s date of transition to IFRSs in its separate financial statements or

(ii)

previous GAAP carrying amount at that date.

A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary, jointly controlled entity or associate that it elects to measure using a deemed cost.

Designation of previously recognised financial instruments

25A IAS 39 permits…

Exceptions to retrospective application of other IFRSs

Non-controlling interests

34C A first-time adopter shall apply the following requirements of IAS 27 (as amended in 2008) …

PRESENTATION AND DISCLOSURE

Use of deemed cost for investments in subsidiaries, jointly controlled entities and associates

44A Similarly, if an entity uses a deemed cost in its opening IFRS statement of financial position for an investment in a subsidiary, jointly controlled entity or associate in its separate financial statements (see paragraph 23B), the entity’s first IFRS separate financial statements shall disclose:

(a)

the aggregate deemed cost of those investments for which deemed cost is their previous GAAP carrying amount;

(b)

the aggregate deemed cost of those investments for which deemed cost is fair value; and

(c)

the aggregate adjustment to the carrying amounts reported under previous GAAP.

EFFECTIVE DATE

47K Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (Amendments to IFRS 1 and IAS 27), issued in May 2008, added paragraphs 13(ea), 23A, 23B and 44A. An entity shall apply those paragraphs for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the paragraphs for an earlier period, it shall disclose that fact.

Amendments to IAS 27 Consolidated and Separate Financial Statements (as amended by Improvements to IFRSs in May 2008)

In paragraph 4, the reference to the ‘cost method’ is deleted. After paragraph 38, paragraphs 38A-38C are added. After paragraph 45A, paragraphs 45B and 45C are added.

DEFINITIONS

[The reference to the ‘cost method’ is deleted.]

ACCOUNTING FOR INVESTMENTS IN SUBSIDIARIES, JOINTLY CONTROLLED ENTITIES AND ASSOCIATES IN SEPARATE FINANCIAL STATEMENTS

38A An entity shall recognise a dividend from a subsidiary, jointly controlled entity or associate in profit or loss in its separate financial statements when its right to receive the dividend is established.

38B When a parent reorganises the structure of its group by establishing a new entity as its parent in a manner that satisfies the following criteria:

(a)

the new parent obtains control of the original parent by issuing equity instruments in exchange for existing equity instruments of the original parent;

(b)

the assets and liabilities of the new group and the original group are the same immediately before and after the reorganisation; and

(c)

the owners of the original parent before the reorganisation have the same absolute and relative interests in the net assets of the original group and the new group immediately before and after the reorganisation

and the new parent accounts for its investment in the original parent in accordance with paragraph 38(a) in its separate financial statements, the new parent shall measure cost at the carrying amount of its share of the equity items shown in the separate financial statements of the original parent at the date of the reorganisation.

38C Similarly, an entity that is not a parent might establish a new entity as its parent in a manner that satisfies the criteria in paragraph 38B. The requirements in paragraph 38B apply equally to such reorganisations. In such cases, references to ‘original parent’ and ‘original group’ are to the ‘original entity’.

EFFECTIVE DATE AND TRANSITION

45B Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (Amendments to IFRS 1 and IAS 27), issued in May 2008, deleted the definition of the cost method from paragraph 4 and added paragraph 38A. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the changes for an earlier period, it shall disclose that fact and apply the related amendments to IAS 18, IAS 21 and IAS 36 at the same time.

45C Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (Amendments to IFRS 1 and IAS 27), issued in May 2008, added paragraphs 38B and 38C. An entity shall apply those paragraphs prospectively to reorganisations occurring in annual periods beginning on or after 1 January 2009. Earlier application is permitted. In addition, an entity may elect to apply paragraphs 38B and 38C retrospectively to past reorganisations within the scope of those paragraphs. However, if an entity restates any reorganisation to comply with paragraph 38B or 38C, it shall restate all later reorganisations within the scope of those paragraphs. If an entity applies paragraph 38B or 38C for an earlier period, it shall disclose that fact.