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Effective Date of Amendments to IFRS 10 and IAS 28

Armen Hovhannisyan Armen Hovhannisyan

ED/2015/7 Effective Date of Amendments to IFRS 10 and IAS 28

Our letter is in reponse to the IASB's Exposure Draft 2015/7 'Effective Date of Amendments to IFRS 10 and IAS 28'.

The IASB proposes to defer indefinitely the effective date of 'Sale or Contribution of Assets between an Investor and its Associate or Joint Venture' until such time as it has finalised amendments, if any, that result from its research project on the equity method. Earlier application would continue to be permitted.

In our letter we agree with the proposal to defer the effective date of the September 2014 amendments in the short to medium term.  We believe if there are likely to be further amendments as a result of the IASB's ongoing research project on equity accounting then it does not make sense to make entities change the way they apply IAS 28 now and then again in the near future.

However, we cautioned the IASB against deferring the effective date indefinitely. As noted in the Basis for Conclusions of the amendments, the changes arose from submissions to the IFRS Interpretations Committee (IC), and the IC concluded that clarifications are necessary.  Accordingly, if it becomes apparent that the IASB's equity accounting research project will not result in changes to IAS 28 in a reasonable timeframe then these amendments should be made effective (along with any necessary clarifications to address the subsequent implementation questions).