Investments in Associates and Joint
Ventures

In April 2001 the International Accounting Standards Board (Board) adopted IAS 28
Accounting for Investments in Associates, which had originally been issued by the
International Accounting Standards Committee in April 1989. IAS 28 Accounting for
Investments in Associates replaced those parts of IAS 3 Consolidated Financial Statements (issued
in June 1976) that dealt with accounting for investment in associates.
In December 2003 the Board issued a revised IAS 28 with a new title—Investments in
Associates. This revised IAS 28 was part of the Board’s initial agenda of technical projects
and also incorporated the guidance contained in three related Interpretations
(SIC-3 Elimination of Unrealized Profits and Losses on Transactions with Associates, SIC-20 Equity
Accounting Method—Recognition of Losses and SIC-33 Consolidation and Equity Method—Potential
Voting Rights and Allocation of Ownership Interests).
In May 2011 the Board issued a revised IAS 28 with a new title—Investments in Associates
and Joint Ventures.
In September 2014 IAS 28 was amended by Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28). These amendments
addressed the conflicting accounting requirements for the sale or contribution of assets
to a joint venture or associate. In December 2015 the mandatory effective date of this
amendment was indefinitely deferred by Effective Date of Amendments to IFRS 10 and IAS 28.
In December 2014 IAS 28 was amended by Investment Entities: Applying the Consolidation
Exception (Amendments to IFRS 10, IFRS 12 and IAS 28). These amendments provided
relief whereby a non-investment entity investor can, when applying the equity method,
choose to retain the fair value through profit or loss measurement applied by its
investment entity associates and joint ventures to their subsidiaries.
In October 2017, IAS 28 was amended by Long-term Interests in Associates and Joint
Ventures (Amendments to IAS 28). These amendments clarify that entities apply
IFRS 9 Financial Instruments to long-term interests in an associate or joint venture to which
the equity method is not applied.
Other Standards have made minor consequential amendments to IAS 28. They include
IFRS 9 Financial Instruments (issued July 2014), Equity Method in Separate Financial
Statements (Amendments to IAS 27) (issued August 2014), Annual Improvements to
IFRS® Standards 2014–2016 Cycle (issued December 2016), IFRS 17 Insurance Contracts (issued
May 2017) and Amendments to References to the Conceptual Framework in IFRS Standards (issued
March 2018).

International Accounting Standard 28 Investments in Associates and Joint Ventures (IAS 28)
is set out in paragraphs 1–47. All the paragraphs have equal authority but retain the
IASC format of the Standard when it was adopted by the IASB. IAS 28 should be read in
the context of its objective and the Basis for Conclusions, the Preface to IFRS
Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors provides a basis for selecting and applying
accounting policies in the absence of explicit guidance.

International Accounting Standard 28
Investments in Associates and Joint Ventures
Objective

The objective of this Standard is to prescribe the accounting for
investments in associates and to set out the requirements for the
application of the equity method when accounting for investments in
associates and joint ventures.

Scope

This Standard shall be applied by all entities that are investors with joint
control of, or significant influence over, an investee.

Definitions

The following terms are used in this Standard with the meanings specified:
An associate is an entity over which the investor has significant influence.
Consolidated financial statements are the financial statements of a group in
which assets, liabilities, equity, income, expenses and cash flows of
the parent and its subsidiaries are presented as those of a single economic
entity.
The equity method is a method of accounting whereby the investment is
initially recognized at cost and adjusted thereafter for the post-acquisition
change in the investor’s share of the investee’s net assets. The investor’s
profit or loss includes its share of the investee’s profit or loss and the
investor’s other comprehensive income includes its share of the investee’s
other comprehensive income.
A joint arrangement is an arrangement of which two or more parties
have joint control.
Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
A joint venture is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the
arrangement.
A joint venture is a party to a joint venture that has joint control of that
joint venture.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint
control of those policies.

The following terms are defined in paragraph 4 of IAS 27 Separate Financial
Statements and in Appendix A of IFRS 10 Consolidated Financial Statements and are
used in this Standard with the meanings specified in the IFRSs in which they
are defined:
• control of an investee
• group
• parent
• separate financial statements
• subsidiary.

Significant influence

If an entity holds, directly or indirectly (eg through subsidiaries), 20 per cent
or more of the voting power of the investee, it is presumed that the entity has
significant influence, unless it can be clearly demonstrated that this is not the
case. Conversely, if the entity holds, directly or indirectly (eg through
subsidiaries), less than 20 per cent of the voting power of the investee, it is
presumed that the entity does not have significant influence, unless such
influence can be clearly demonstrated. A substantial or majority ownership by
another investor does not necessarily preclude an entity from having
significant influence.
The existence of significant influence by an entity is usually evidenced in one
or more of the following ways:
(a) representation on the board of directors or equivalent governing body
of the investee;
(b) participation in policy-making processes, including participation in
decisions about dividends or other distributions;
(c) material transactions between the entity and its investee;
(d) interchange of managerial personnel; or
(e) provision of essential technical information.
An entity may own share warrants, share call options, debt or equity
instruments that are convertible into ordinary shares, or other similar
instruments that have the potential, if exercised or converted, to give the
entity additional voting power or to reduce another party’s voting power over
the financial and operating policies of another entity (ie potential voting
rights). The existence and effect of potential voting rights that are currently
exercisable or convertible, including potential voting rights held by other
entities, are considered when assessing whether an entity has significant
influence. Potential voting rights are not currently exercisable or convertible
when, for example, they cannot be exercised or converted until a future date
or until the occurrence of a future event.

In assessing whether potential voting rights contribute to significant
influence, the entity examines all facts and circumstances (including the
terms of exercise of the potential voting rights and any other contractual
arrangements whether considered individually or in combination) that affect
potential rights, except the intentions of management and the financial ability
to exercise or convert those potential rights.
An entity loses significant influence over an investee when it loses the power
to participate in the financial and operating policy decisions of that investee.
The loss of significant influence can occur with or without a change in
absolute or relative ownership levels. It could occur, for example, when an
associate becomes subject to the control of a government, court, administrator
or regulator. It could also occur as a result of a contractual arrangement.

Equity method

Under the equity method, on initial recognition the investment in an associate
or a joint venture is recognized at cost, and the carrying amount is increased
or decreased to recognize the investor’s share of the profit or loss of the
investee after the date of acquisition. The investor’s share of the investee’s
profit or loss is recognized in the investor’s profit or loss. Distributions
received from an investee reduce the carrying amount of the investment.
Adjustments to the carrying amount may also be necessary for changes in the
investor’s proportionate interest in the investee arising from changes in the
investee’s other comprehensive income. Such changes include those arising
from the revaluation of property, plant and equipment and from foreign
exchange translation differences. The investor’s share of those changes is
recognized in the investor’s other comprehensive income (see IAS 1
Presentation of Financial Statements).
The recognition of income on the basis of distributions received may not be an
adequate measure of the income earned by an investor on an investment in an
associate or a joint venture because the distributions received may bear little
relation to the performance of the associate or joint venture. Because the
investor has joint control of, or significant influence over, the investee, the
investor has an interest in the associate’s or joint venture’s performance and,
as a result, the return on its investment. The investor accounts for this
interest by extending the scope of its financial statements to include its share
of the profit or loss of such an investee. As a result, application of the equity
method provides more informative reporting of the investor’s net assets and
profit or loss.
When potential voting rights or other derivatives containing potential voting
rights exist, an entity’s interest in an associate or a joint venture is
determined solely on the basis of existing ownership interests and does not
reflect the possible exercise or conversion of potential voting rights and other
derivative instruments, unless paragraph 13 applies.

In some circumstances, an entity has, in substance, an existing ownership as a
result of a transaction that currently gives it access to the returns associated
with an ownership interest. In such circumstances, the proportion allocated to
the entity is determined by taking into account the eventual exercise of those
potential voting rights and other derivative instruments that currently give
the entity access to the returns.
IFRS 9 Financial Instruments does not apply to interests in associates and joint
ventures that are accounted for using the equity method. When instruments
containing potential voting rights in substance currently give access to the
returns associated with an ownership interest in an associate or a joint
venture, the instruments are not subject to IFRS 9. In all other cases,
instruments containing potential voting rights in an associate or a joint
venture are accounted for in accordance with IFRS 9.
An entity also applies IFRS 9 to other financial instruments in
an associate or joint venture to which the equity method is not applied. These
include long-term interests that, in substance, form part of the entity’s net
investment in an associate or joint venture (see paragraph 38). An entity
applies IFRS 9 to such long-term interests before it applies paragraph 38
and paragraphs 40–43 of this Standard. In applying IFRS 9, the entity does not
take account of any adjustments to the carrying amount of long-term interests
that arise from applying this Standard.
Unless an investment, or a portion of an investment, in an associate or a joint
venture is classified as held for sale in accordance with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations, the investment, or any retained interest

in the investment not classified as held for sale, shall be classified as a non-
current asset.

Application of the equity method

An entity with joint control of, or significant influence over, an investee shall
account for its investment in an associate or a joint venture using the equity
method except when that investment qualifies for exemption in accordance
with paragraphs 17–19.

Exemptions from applying the equity method

An entity need not apply the equity method to its investment in an associate
or a joint venture if the entity is a parent that is exempt from preparing
consolidated financial statements by the scope exception in paragraph 4(a) of
IFRS 10 or if all the following apply:
(a) The entity is a wholly-owned subsidiary, or is a partially-owned
subsidiary of another entity and its other owners, including those not
otherwise entitled to vote, have been informed about, and do not
object to, the entity not applying the equity method.
(b) The entity’s debt or equity instruments are not traded in a public
market (a domestic or foreign stock exchange or an over-the-counter
market, including local and regional markets).

(c) The entity did not file, nor is it in the process of filing, its financial
statements with a securities commission or other regulatory
organization, for the purpose of issuing any class of instruments in a
public market.
(d) The ultimate or any intermediate parent of the entity produces
financial statements available for public use that comply with IFRSs, in
which subsidiaries are consolidated or are measured at fair value
through profit or loss in accordance with IFRS 10.
When an investment in an associate or a joint venture is held by, or is held
indirectly through, an entity that is a venture capital organization, or a
mutual fund, unit trust and similar entities including investment-linked
insurance funds, the entity may elect to measure that investment at fair value
through profit or loss in accordance with IFRS 9. An example of an
investment-linked insurance fund is a fund held by an entity as the
underlying items for a group of insurance contracts with direct participation
features. For the purposes of this election, insurance contracts include
investment contracts with discretionary participation features. An entity shall
make this election separately for each associate or joint venture, at initial
recognition of the associate or joint venture. (See IFRS 17 Insurance
Contracts for terms used in this paragraph that are defined in that Standard.)
When an entity has an investment in an associate, a portion of which is held
indirectly through a venture capital organization, or a mutual fund, unit trust
and similar entities including investment-linked insurance funds, the entity
may elect to measure that portion of the investment in the associate at fair
value through profit or loss in accordance with IFRS 9 regardless of whether
the venture capital organization, or the mutual fund, unit trust and similar
entities including investment-linked insurance funds, has significant
influence over that portion of the investment. If the entity makes that
election, the entity shall apply the equity method to any remaining portion of
its investment in an associate that is not held through a venture capital
organization, or a mutual fund, unit trust and similar entities including
investment-linked insurance funds.

Classification as held for sale

An entity shall apply IFRS 5 to an investment, or a portion of an investment,
in an associate or a joint venture that meets the criteria to be classified as held
for sale. Any retained portion of an investment in an associate or a joint
venture that has not been classified as held for sale shall be accounted for
using the equity method until disposal of the portion that is classified as held
for sale takes place. After the disposal takes place, an entity shall account for
any retained interest in the associate or joint venture in accordance with
IFRS 9 unless the retained interest continues to be an associate or a joint
venture, in which case the entity uses the equity method.

When an investment, or a portion of an investment, in an associate or a joint
venture previously classified as held for sale no longer meets the criteria to be
so classified, it shall be accounted for using the equity method retrospectively
as from the date of its classification as held for sale. Financial statements for
the periods since classification as held for sale shall be amended accordingly.

Discontinuing the use of the equity method

An entity shall discontinue the use of the equity method from the date
when its investment ceases to be an associate or a joint venture as follows:
(a) If the investment becomes a subsidiary, the entity shall account for
its investment in accordance with IFRS 3 Business Combinations and
IFRS 10.
(b) If the retained interest in the former associate or joint venture is a
financial asset, the entity shall measure the retained interest at fair
value. The fair value of the retained interest shall be regarded as its
fair value on initial recognition as a financial asset in accordance
with IFRS 9. The entity shall recognize in profit or loss any
difference between:
(i) the fair value of any retained interest and any proceeds from
disposing of a part interest in the associate or joint venture;
and
(ii) the carrying amount of the investment at the date the equity
method was discontinued.

(c) When an entity discontinues the use of the equity method, the
entity shall account for all amounts previously recognized in other
comprehensive income in relation to that investment on the same
basis as would have been required if the investee had directly
disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in other comprehensive
income by the investee would be reclassified to profit or loss on the disposal of
the related assets or liabilities, the entity reclassifies the gain or loss from
equity to profit or loss (as a reclassification adjustment) when the equity
method is discontinued. For example, if an associate or a joint venture has
cumulative exchange differences relating to a foreign operation and the entity
discontinues the use of the equity method, the entity shall reclassify to profit
or loss the gain or loss that had previously been recognized in other
comprehensive income in relation to the foreign operation.
If an investment in an associate becomes an investment in a joint venture
or an investment in a joint venture becomes an investment in an associate,
the entity continues to apply the equity method and does not remeasure
the retained interest.

Changes in ownership interest

If an entity’s ownership interest in an associate or a joint venture is reduced,
but the investment continues to be classified either as an associate or a joint
venture respectively, the entity shall reclassify to profit or loss the proportion
of the gain or loss that had previously been recognized in other
comprehensive income relating to that reduction in ownership interest if that
gain or loss would be required to be reclassified to profit or loss on the
disposal of the related assets or liabilities.

Equity method procedures

Many of the procedures that are appropriate for the application of the equity
method are similar to the consolidation procedures described in IFRS 10.
Furthermore, the concepts underlying the procedures used in accounting for
the acquisition of a subsidiary are also adopted in accounting for the
acquisition of an investment in an associate or a joint venture.
A group’s share in an associate or a joint venture is the aggregate of the
holdings in that associate or joint venture by the parent and its subsidiaries.
The holdings of the group’s other associates or joint ventures are ignored for
this purpose. When an associate or a joint venture has subsidiaries, associates
or joint ventures, the profit or loss, other comprehensive income and net
assets taken into account in applying the equity method are those recognized
in the associate’s or joint venture’s financial statements (including the
associate’s or joint venture’s share of the profit or loss, other comprehensive
income and net assets of its associates and joint ventures), after any
adjustments necessary to give effect to uniform accounting policies (see
paragraphs 35–36A).
Gains and losses resulting from ‘upstream’ and ‘downstream’ transactions
involving assets that do not constitute a business, as defined in IFRS 3,
between an entity (including its consolidated subsidiaries) and
its associate or joint venture are recognized in the entity’s financial
statements only to the extent of unrelated investors’ interests in the associate
or joint venture. ‘Upstream’ transactions are, for example, sales of assets from
an associate or a joint venture to the investor. The entity’s share in the
associate’s or the joint venture’s gains or losses resulting from these
transactions is eliminated. ‘Downstream’ transactions are, for example, sales
or contributions of assets from the investor to its associate or its joint venture.
When downstream transactions provide evidence of a reduction in the net
realizable value of the assets to be sold or contributed, or of an impairment
loss of those assets, those losses shall be recognized in full by the investor.
When upstream transactions provide evidence of a reduction in the net
realizable value of the assets to be purchased or of an impairment loss of those
assets, the investor shall recognize its share in those losses.
The gain or loss resulting from the contribution of non-monetary assets that
do not constitute a business, as defined in IFRS 3, to an associate or a joint
venture in exchange for an equity interest in that associate or joint venture
shall be accounted for in accordance with paragraph 28, except when the contribution lacks commercial substance, as that term is described in IAS 16
Property, Plant and Equipment. If such a contribution lacks commercial
substance, the gain or loss is regarded as unrealized and is not recognized
unless paragraph 31 also applies. Such unrealized gains and losses shall be
eliminated against the investment accounted for using the equity method and
shall not be presented as deferred gains or losses in the entity’s consolidated
statement of financial position or in the entity’s statement of financial
position in which investments are accounted for using the equity method.
If, in addition to receiving an equity interest in an associate or a joint venture,
an entity receives monetary or non-monetary assets, the entity recognizes in
full in profit or loss the portion of the gain or loss on the non-monetary
contribution relating to the monetary or non-monetary assets received.
The gain or loss resulting from a downstream transaction involving assets that
constitute a business, as defined in IFRS 3, between an entity (including its
consolidated subsidiaries) and its associate or joint venture is recognized in
full in the investor’s financial statements.
An entity might sell or contribute assets in two or more arrangements
(transactions). When determining whether assets that are sold or contributed
constitute a business, as defined in IFRS 3, an entity shall consider whether
the sale or contribution of those assets is part of multiple arrangements that
should be accounted for as a single transaction in accordance with the
requirements in paragraph B97 of IFRS 10.
An investment is accounted for using the equity method from the date on
which it becomes an associate or a joint venture. On acquisition of the
investment, any difference between the cost of the investment and the entity’s
share of the net fair value of the investee’s identifiable assets and liabilities is
accounted for as follows:
(a) Goodwill relating to an associate or a joint venture is included in the
carrying amount of the investment. Amortization of that goodwill is
not permitted.
(b) Any excess of the entity’s share of the net fair value of the investee’s
identifiable assets and liabilities over the cost of the investment is
included as income in the determination of the entity’s share of the
associate or joint venture’s profit or loss in the period in which the
investment is acquired.
Appropriate adjustments to the entity’s share of the associate’s or joint
venture’s profit or loss after acquisition are made in order to account, for
example, for depreciation of the depreciable assets based on their fair values
at the acquisition date. Similarly, appropriate adjustments to the entity’s
share of the associate’s or joint venture’s profit or loss after acquisition are
made for impairment losses such as for goodwill or property, plant and
equipment.

The most recent available financial statements of the associate or joint
venture are used by the entity in applying the equity method. When the
end of the reporting period of the entity is different from that of the
associate or joint venture, the associate or joint venture prepares, for the
use of the entity, financial statements as of the same date as the financial
statements of the entity unless it is impracticable to do so.
When, in accordance with paragraph 33, the financial statements of an
associate or a joint venture used in applying the equity method are
prepared as of a date different from that used by the entity, adjustments
shall be made for the effects of significant transactions or events that
occur between that date and the date of the entity’s financial statements.
In any case, the difference between the end of the reporting period of the
associate or joint venture and that of the entity shall be no more than
three months. The length of the reporting periods and any difference
between the ends of the reporting periods shall be the same from period to
period.
The entity’s financial statements shall be prepared using uniform
accounting policies for like transactions and events in similar
circumstances.
Except as described in paragraph 36A, if an associate or a joint venture uses
accounting policies other than those of the entity for like transactions and
events in similar circumstances, adjustments shall be made to make the
associate’s or joint venture’s accounting policies conform to those of the
entity when the associate’s or joint venture’s financial statements are used by
the entity in applying the equity method.
Notwithstanding the requirement in paragraph 36, if an entity that is not
itself an investment entity has an interest in an associate or joint venture that
is an investment entity, the entity may, when applying the equity method,
elect to retain the fair value measurement applied by that investment entity
associate or joint venture to the investment entity associate’s or joint
venture’s interests in subsidiaries. This election is made separately for each
investment entity associate or joint venture, at the later of the date on which
(a) the investment entity associate or joint venture is initially recognized;
(b) the associate or joint venture becomes an investment entity; and (c) the
investment entity associate or joint venture first becomes a parent.
If an associate or a joint venture has outstanding cumulative preference
shares that are held by parties other than the entity and are classified as
equity, the entity computes its share of profit or loss after adjusting for the
dividends on such shares, whether or not the dividends have been declared.
If an entity’s share of losses of an associate or a joint venture equals or
exceeds its interest in the associate or joint venture, the entity discontinues
recognizing its share of further losses. The interest in an associate or a joint
venture is the carrying amount of the investment in the associate or joint
venture determined using the equity method together with any long-term
interests that, in substance, form part of the entity’s net investment in the
associate or joint venture. For example, an item for which settlement is neither planned nor likely to occur in the foreseeable future is, in substance,
an extension of the entity’s investment in that associate or joint venture. Such
items may include preference shares and long-term receivables or loans, but
do not include trade receivables, trade payables or any long-term receivables
for which adequate collateral exists, such as secured loans. Losses recognized
using the equity method in excess of the entity’s investment in ordinary
shares are applied to the other components of the entity’s interest in an
associate or a joint venture in the reverse order of their seniority (ie priority in
liquidation).
After the entity’s interest is reduced to zero, additional losses are provided for,
and a liability is recognized, only to the extent that the entity has incurred
legal or constructive obligations or made payments on behalf of the associate
or joint venture. If the associate or joint venture subsequently reports profits,
the entity resumes recognizing its share of those profits only after its share of
the profits equals the share of losses not recognized.

Impairment losses

After application of the equity method, including recognizing the associate’s
or joint venture’s losses in accordance with paragraph 38, the entity applies
paragraphs 41A–41C to determine whether there is any objective evidence
that its net investment in the associate or joint venture is impaired.
[Deleted]
The net investment in an associate or joint venture is impaired and
impairment losses are incurred if, and only if, there is objective evidence of
impairment as a result of one or more events that occurred after the initial
recognition of the net investment (a ‘loss event’) and that loss event (or events)
has an impact on the estimated future cash flows from the net investment
that can be reliably estimated. It may not be possible to identify a single,
discrete event that caused the impairment. Rather the combined effect of
several events may have caused the impairment. Losses expected as a result of
future events, no matter how likely, are not recognized. Objective evidence
that the net investment is impaired includes observable data that comes to the
attention of the entity about the following loss events:
(a) significant financial difficulty of the associate or joint venture;
(b) a breach of contract, such as a default or delinquency in payments by
the associate or joint venture;
(c) the entity, for economic or legal reasons relating to its associate’s or
joint venture’s financial difficulty, granting to the associate or joint
venture a concession that the entity would not otherwise consider;
(d) it becoming probable that the associate or joint venture will enter
bankruptcy or other financial reorganization; or
(e) the disappearance of an active market for the net investment because
of financial difficulties of the associate or joint venture.

The disappearance of an active market because the associate’s or joint
venture’s equity or financial instruments are no longer publicly traded is not
evidence of impairment. A downgrade of an associate’s or joint venture’s
credit rating or a decline in the fair value of the associate or joint venture, is
not of itself, evidence of impairment, although it may be evidence of
impairment when considered with other available information.
In addition to the types of events in paragraph 41A, objective evidence of
impairment for the net investment in the equity instruments of the associate
or joint venture includes information about significant changes with an
adverse effect that have taken place in the technological, market, economic or
legal environment in which the associate or joint venture operates, and
indicates that the cost of the investment in the equity instrument may not be
recovered. A significant or prolonged decline in the fair value of an
investment in an equity instrument below its cost is also objective evidence of
impairment.
Because goodwill that forms part of the carrying amount of the net
investment in an associate or a joint venture is not separately recognised, it is
not tested for impairment separately by applying the requirements for
impairment testing goodwill in IAS 36 Impairment of Assets. Instead, the entire
carrying amount of the investment is tested for impairment in accordance
with IAS 36 as a single asset, by comparing its recoverable amount (higher of
value in use and fair value less costs of disposal) with its carrying amount
whenever application of paragraphs 41A–41C indicates that the net
investment may be impaired. An impairment loss recognized in those
circumstances is not allocated to any asset, including goodwill, that forms
part of the carrying amount of the net investment in the associate or joint
venture. Accordingly, any reversal of that impairment loss is recognized in
accordance with IAS 36 to the extent that the recoverable amount of the net
investment subsequently increases. In determining the value in use of the net
investment, an entity estimates:
(a) its share of the present value of the estimated future cash flows
expected to be generated by the associate or joint venture, including
the cash flows from the operations of the associate or joint venture
and the proceeds from the ultimate disposal of the investment; or
(b) the present value of the estimated future cash flows expected to arise
from dividends to be received from the investment and from its
ultimate disposal.
Using appropriate assumptions, both methods give the same result.
The recoverable amount of an investment in an associate or a joint venture
shall be assessed for each associate or joint venture, unless the associate or
joint venture does not generate cash inflows from continuing use that are
largely independent of those from other assets of the entity.

Separate financial statements

An investment in an associate or a joint venture shall be accounted for in the
entity’s separate financial statements in accordance with paragraph 10 of
IAS 27 (as amended in 2011).

Effective date and transition

An entity shall apply this Standard for annual periods beginning on or after
1 January 2013. Earlier application is permitted. If an entity applies this
Standard earlier, it shall disclose that fact and apply IFRS 10, IFRS 11 Joint
Arrangements, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 (as
amended in 2011) at the same time.
IFRS 9, as issued in July 2014, amended paragraphs 40–42 and added
paragraphs 41A–41C. An entity shall apply those amendments when it applies
IFRS 9.
Equity Method in Separate Financial Statements (Amendments to IAS 27), issued in
August 2014, amended paragraph 25. An entity shall apply that amendment
for annual periods beginning on or after 1 January 2016 retrospectively in
accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors. Earlier application is permitted. If an entity applies that amendment
for an earlier period, it shall disclose that fact.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28), issued in September 2014, amended
paragraphs 28 and 30 and added paragraphs 31A–31B. An entity shall apply
those amendments prospectively to the sale or contribution of assets
occurring in annual periods beginning on or after a date to be determined by
the IASB. Earlier application is permitted. If an entity applies those
amendments earlier, it shall disclose that fact.
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10,
IFRS 12 and IAS 28), issued in December 2014, amended paragraphs 17, 27 and
36 and added paragraph 36A. An entity shall apply those amendments for
annual periods beginning on or after 1 January 2016. Earlier application is
permitted. If an entity applies those amendments for an earlier period, it shall
disclose that fact.
Annual Improvements to IFRS Standards 2014–2016 Cycle, issued in December
2016, amended paragraphs 18 and 36A. An entity shall apply those
amendments retrospectively in accordance with IAS 8 for annual periods
beginning on or after 1 January 2018. Earlier application is permitted. If an
entity applies those amendments for an earlier period, it shall disclose that
fact.
IFRS 17, issued in May 2017, amended paragraph 18. An entity shall apply that
amendment when it applies IFRS 17.

Long-term Interests in Associates and Joint Ventures, issued in October 2017, added
paragraph 14A and deleted paragraph 41. An entity shall apply those
amendments retrospectively in accordance with IAS 8 for annual reporting
periods beginning on or after 1 January 2019, except as specified in
paragraphs 45H–45K. Earlier application is permitted. If an entity applies
those amendments earlier, it shall disclose that fact.
An entity that first applies the amendments in paragraph 45G at the same
time it first applies IFRS 9 shall apply the transition requirements in IFRS 9 to
the long-term interests described in paragraph 14A.
An entity that first applies the amendments in paragraph 45G after it first
applies IFRS 9 shall apply the transition requirements in IFRS 9 necessary for
applying the requirements set out in paragraph 14A to long-term interests.
For that purpose, references to the date of initial application in IFRS 9 shall be
read as referring to the beginning of the annual reporting period in which the
entity first applies the amendments (the date of initial application of the
amendments). The entity is not required to restate prior periods to reflect the
application of the amendments. The entity may restate prior periods only if it
is possible without the use of hindsight.
When first applying the amendments in paragraph 45G, an entity that applies
the temporary exemption from IFRS 9 in accordance with IFRS 4 Insurance
Contracts is not required to restate prior periods to reflect the application of
the amendments. The entity may restate prior periods only if it is possible
without the use of hindsight.
If an entity does not restate prior periods applying paragraph 45I or
paragraph 45J, at the date of initial application of the amendments it shall
recognize in the opening retained earnings (or other component of equity, as
appropriate) any difference between:
(a) the previous carrying amount of long-term interests described in
paragraph 14A at that date; and
(b) the carrying amount of those long-term interests at that date.

References to IFRS 9

If an entity applies this Standard but does not yet apply IFRS 9, any reference
to IFRS 9 shall be read as a reference to IAS 39.

Withdrawal of IAS 28 (2003)

This Standard supersedes IAS 28 Investments in Associates (as revised in 2003).

Approval by the Board of IAS 28 issued in December 2003

International Accounting Standard 28 Investments in Associates (as revised in 2003) was
approved for issue by the fourteen members of the International Accounting Standards
Board.
Sir David Tweedie Chairman
Thomas E Jones Vice-Chairman
Mary E Barth
Hans-Georg Bruns
Anthony T Cope
Robert P Garnett
Gilbert Gélard
James J Leisenring
Warren J McGregor
Patricia L O’Malley
Harry K Schmid
John T Smith
Geoffrey Whittington
Tatsumi Yamada

Approval by the Board of Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture (Amendments to
IFRS 10 and IAS 28) issued in September 2014

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture was approved
for issue by eleven of the fourteen members of the International Accounting Standards
Board. Mr Kabureck, Ms Lloyd and Mr Ochi dissented1 from the issue of the amendments
to IFRS 10 and IAS 28. Their dissenting opinions are set out after the Basis for
Conclusions.
Hans Hoogervorst Chairman
Ian Mackintosh Vice-Chairman
Stephen Cooper
Philippe Danjou
Martin Edelmann
Patrick Finnegan
Amaro Luiz de Oliveira Gomes
Gary Kabureck
Suzanne Lloyd
Takatsugu Ochi
Darrel Scott
Chungwoo Suh
Mary Tokar
Wei-Guo Zhang

Approval by the Board of Investment Entities: Applying the
Consolidation Exception (Amendments to IFRS 10, IFRS 12 and
IAS 28) issued in December 2014

Investment Entities: Applying the Consolidation Exception was approved for issue by the
fourteen members of the International Accounting Standards Board.
Hans Hoogervorst Chairman
Ian Mackintosh Vice-Chairman
Stephen Cooper
Philippe Danjou
Amaro Luiz De Oliveira Gomes
Martin Edelmann
Patrick Finnegan
Gary Kabureck
Suzanne Lloyd
Takatsugu Ochi
Darrel Scott
Chungwoo Suh
Mary Tokar
Wei-Guo Zhang

Approval by the Board of Effective Date of Amendments to
IFRS 10 and IAS 28 issued in December 2015

Effective Date of Amendments to IFRS 10 and IAS 28 was approved for publication by the
fourteen members of the International Accounting Standards Board.
Hans Hoogervorst Chairman
Ian Mackintosh Vice-Chairman
Stephen Cooper
Philippe Danjou
Martin Edelmann
Patrick Finnegan
Amaro Gomes
Gary Kabureck
Suzanne Lloyd
Takatsugu Ochi
Darrel Scott
Chungwoo Suh
Mary Tokar
Wei-Guo Zhang

Approval by the Board of Long-term Interests in Associates and
Joint Ventures (Amendments to IAS 28) issued in October 2017

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) was approved for
issue by 10 of 14 members of the International Accounting Standards Board (Board).
Mr Ochi dissented. His dissenting opinion is set out after the Basis for Conclusions.
Messrs Anderson and Lu and Ms Tarca abstained in view of their recent appointments to
the Board.
Hans Hoogervorst Chairman
Suzanne Lloyd Vice-Chair
Nick Anderson
Martin Edelmann
Françoise Flores
Amaro Luiz de Oliveira Gomes
Gary Kabureck
Jianqiao Lu
Takatsugu Ochi
Darrel Scott
Thomas Scott
Chungwoo Suh
Ann Tarca
Mary Tokar