Page 10 - ICAP NewsLetter October 2014

NEWSLETTER The Institute of Chartered Accountants of Pakistan October 2014  IAS 28 Investments in Associates and Joint Ventures. Technical Update The amendments would state that when an entity measures its investments in associates or joint Unit of account for investments ventures at fair value and those investments are quoted in an active market, their fair value shall be in subsidiaries, joint ventures the product of the quoted price multiplied by the quantity of the financial instruments that make up and associates the investments without adjustment. The International Accounting Standards Board (IASB) has published an Exposure Draft (ED/2014/4) Measuring  IAS 36 Impairment of Assets. The amendments Quoted Investments in Subsidiaries, Joint Ventures and concern CGUs where the recoverable amount is Associates at Fair Value (Proposed amendments to IFRS 10, determined on the basis of fair value less costs of disposal. They clarify that when the CGU is an IFRS 12, IAS 27, IAS 28 and IAS 36 and Illustrative Examples investment in a subsidiary, joint venture or associate for IFRS 13). Comments are requested by 16 January that is quoted in an active market, its fair value shall 2015. The proposed amendments confirm that the unit be the product of the quoted price multiplied by the of account for investments in subsidiaries, joint ventures quantity of the financial instruments that make up and associates is the investment as a whole, but that the investments without adjustment. the fair value measurement of quoted investments in subsidiaries, joint ventures and associates should be the  IFRS 13 Fair Value Measurement. The amendments product of the quoted price multiplied by the quantity consist of an illustrative example showing the of financial instruments held, without adjustments. application of the exception in paragraph IFRS 13.48 Following amendments are proposed: to a group of financial assets and financial liabilities whose market risks are substantially the same and  IFRS 10 Consolidated Financial Statements. whose fair value measurement is categorised within The amendments would specify that when an Level 1 of the fair value hierarchy. investment entity has an investment in a subsidiary that is quoted in an active market, its fair value shall Final guide on supplementary be the product of the quoted price multiplied by the quantity of the financial instruments that make up financial measures the investment without adjustment. The Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants  IFRS 12 Disclosure of Interests in Other Entities. The amendments would define that the fair value of an (IFAC) has released the final version of its ‘International investment in a joint venture or associate that is Good Practice Guidance, Developing and Reporting quoted in an active market shall be the product of Supplementary Financial Measures’. The guide provides the quoted price multiplied by the quantity of the recommendations for the use of supplementary financial instruments that make up the investment financial measures as part of high-quality financial without adjustment. reporting in organisations.  IAS 27 Separate Financial Statements. The The guide builds on the qualitative characteristics amendments would clarify that when an entity of useful financial reporting and recommends that accounts for its investments in subsidiaries, joint supplementary financial measures should be relevant, ventures and associates at fair value and those complete, neutral, transparent, understandable and investments are quoted in an active market, verifiable, comparable, and timely. Additionally, the their fair value shall be the product of the quoted guide recommends that companies should consider price multiplied by the quantity of the financial obtaining internal or external assurance on their instruments that make up the investments without supplementary financial information voluntarily where adjustment. obtaining assurance on these is not mandated. 10