IASB podcast June 2026

Now, turning our attention to the equity method, I'll just remind you a little bit about the project background.

The project objectives are twofold.

One is to reduce diversity in practice by answering some particularly, uh, thorny application questions, and the other was just to improve the understandability of IAS Twenty-Eight, the, the standard investments in associates and joint ventures.

And that's as simple as, in some cases, rearranging the order of the standard, making it more readable.

Uh, and I think it's interesting to note that that's particularly important for those of our stakeholders where English is not their first language.

And so understandability is, is very important to those jurisdictions.

Now, we published the exposure draft in twenty twenty-four, and we've been re-deliberating since September of twenty twenty-five.

And as well, I'll remind everyone that last month, the IASB decided to introduce an accounting policy choice that permits an investor to choose either full or restricted recognition of gains or losses on all transactions with associates, unless, of course, it's gains or losses on the transfer of business, of a business which would be recognized in full.

We don't, in today's world, uh, introduce many accounting policy choice, and so we had a particularly good discussion on why we chose to do it there.

Absolutely.

And, and I think, uh, remembering that, that was really a very lively, uh, and, uh, I wouldn't say emotional, but passionate debate, probably.

Yes.

And, and that, I think that main, main theme just, uh, continued.

So this month we discussed separate financial statements, um, the disclosures in IFRS Twelve and, uh, in IFRS Nineteen, our reduced disclosure standard.

So let me, let me take, um, the decisions and the discussions, um, in turn.

Starting with separate financial statements, um, following the, um, accounting policy choice that Linda, you just mentioned, um, we, after many iterations at that board meeting, decided, um, that we would provide the same accounting policy choice for investments in associates and joint ventures as well, uh, in, in the separate financial statements.

But we also decided that that accounting policy choice can be selected and made independently of the policy choice that was elected in the consolidated financial statements.

So consistency was not deemed to be necessary.

Secondly, we decided that if there was a subsidiary that was accounted for under the equity method as per IAS Twenty-Seven, we would also permit an accounting policy choice that can be independent of the policy choice that was elected for associates and joint ventures.

So two policy ch-choices, and they don't have to be consistent with each other.

Why did we do that? Because we believe that this responds to concerns in jurisdictions where separate financial statements affect dividends, taxable income, or legal capital, and we've heard that loud and clear from those jurisdictions, and we just wanted to recognize that and, and respond to it.

Lastly, we've decided to drop proposals on acquisition in stages or loss of control of a subsidiary accounted for under the equity method when the entity continues to apply the equity method to the investment.

The reason here really being that we said this is a project on IAS Twenty-Eight, and, um, the question about how, what to do in terms of acquisition in stages or loss of and control of a subsidiary, uh, was really more an IAS Twenty-Seven issue, and we felt that this was out of scope.

So therefore, we decided to drop it.

Turning next to disclosures on IFRS Twelve, um, we decided to proceed with a new disclosure objective, so explaining the changes in the carrying amount, uh, of investments in associates.