Table of Contents
In May 2011 the International Accounting Standards Board issued IFRS 12 Disclosure of
Interests in Other Entities. IFRS 12 replaced the disclosure requirements in IAS 27
Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31
Interests in Joint Ventures.
In June 2012 IFRS 12 was amended by Consolidated Financial Statements, Joint Arrangements
and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10,
IFRS 11 and IFRS 12). These amendments provided additional transition relief in IFRS 12,
limiting the requirement to present adjusted comparative information to only the annual
period immediately preceding the first annual period for which IFRS 12 is applied.
Furthermore, for disclosures related to unconsolidated structured entities, the
amendments removed the requirement to present comparative information for periods
before IFRS 12 is first applied.
In October 2012 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
introduced new disclosure requirements for investment entities that, in accordance with
IFRS 10 Consolidated Financial Statements, measure their subsidiaries at fair value through
profit or loss instead of consolidating them.
Other Standards have made minor amendments to IFRS 12, including Investment Entities:
Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) (issued
December 2014), Annual Improvements to IFRS® Standards 2014–2016 Cycle (issued December
2016) and Amendments to References to the Conceptual Framework in IFRS Standards (issued
March 2018).
International Financial Reporting Standard 12 Disclosure of Interests in Other Entities
(IFRS 12) is set out in paragraphs 1–31 and Appendices A–D. All the paragraphs have
equal authority. Paragraphs in bold type state the main principles. Terms defined in
Appendix A are in italics the first time they appear in the IFRS. Definitions of other
terms are given in the Glossary for International Financial Reporting Standards.
IFRS 12 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.
The objective of this IFRS is to require an entity to disclose information
that enables users of its financial statements to evaluate:
(a) the nature of, and risks associated with, its interests in other entities;
and
(b) the effects of those interests on its financial position, financial
performance and cash flows.
To meet the objective in paragraph 1, an entity shall disclose:
(a) the significant judgements and assumptions it has made in
determining:
(i) the nature of its interest in another entity or arrangement;
(ii) the type of joint arrangement in which it has an interest
(paragraphs 7–9);
(iii) that it meets the definition of an investment entity, if
applicable (paragraph 9A); and
(b) information about its interests in:
(i) subsidiaries (paragraphs 10–19);
(ii) joint arrangements and associates (paragraphs 20–23); and
(iii) structured entities that are not controlled by the entity
(unconsolidated structured entities) (paragraphs 24–31).
If the disclosures required by this IFRS, together with disclosures required by
other IFRSs, do not meet the objective in paragraph 1, an entity shall disclose
whatever additional information is necessary to meet that objective.
An entity shall consider the level of detail necessary to satisfy the disclosure
objective and how much emphasis to place on each of the requirements in this
IFRS. It shall aggregate or disaggregate disclosures so that useful information
is not obscured by either the inclusion of a large amount of insignificant
detail or the aggregation of items that have different characteristics (see
paragraphs B2–B6).
This IFRS shall be applied by an entity that has an interest in any of the
following:
(a) subsidiaries
(b) joint arrangements (ie joint operations or joint ventures)
(c) associates
(d) unconsolidated structured entities.
Except as described in paragraph B17, the requirements in this IFRS apply to
an entity’s interests listed in paragraph 5 that are classified (or included in a
disposal group that is classified) as held for sale or discontinued operations in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
This IFRS does not apply to:
(a) post-employment benefit plans or other long-term employee benefit
plans to which IAS 19 Employee Benefits applies.
(b) an entity’s separate financial statements to which IAS 27 Separate
Financial Statements applies. However:
(i) if an entity has interests in unconsolidated structured entities
and prepares separate financial statements as its only financial
statements, it shall apply the requirements in paragraphs
24–31 when preparing those separate financial statements.
(ii) an investment entity that prepares financial statements in
which all of its subsidiaries are measured at fair value through
profit or loss in accordance with paragraph 31 of IFRS 10 shall
present the disclosures relating to investment entities required
by this IFRS.
(c) an interest held by an entity that participates in, but does not have
joint control of, a joint arrangement unless that interest results in
significant influence over the arrangement or is an interest in a
structured entity.
(d) an interest in another entity that is accounted for in accordance with
IFRS 9 Financial Instruments. However, an entity shall apply this IFRS:
(i) when that interest is an interest in an associate or a joint
venture that, in accordance with IAS 28 Investments in Associates
and Joint Ventures, is measured at fair value through profit or
loss; or
(ii) when that interest is an interest in an unconsolidated
structured entity.
An entity shall disclose information about significant judgements and
assumptions it has made (and changes to those judgements and
assumptions) in determining:
(a) that it has control of another entity, ie an investee as described in
paragraphs 5 and 6 of IFRS 10 Consolidated Financial Statements;
(b) that it has joint control of an arrangement or significant influence
over another entity; and
(c) the type of joint arrangement (ie joint operation or joint venture)
when the arrangement has been structured through a separate
vehicle.
The significant judgements and assumptions disclosed in accordance with
paragraph 7 include those made by the entity when changes in facts and
circumstances are such that the conclusion about whether it has control, joint
control or significant influence changes during the reporting period.
To comply with paragraph 7, an entity shall disclose, for example, significant
judgements and assumptions made in determining that:
(a) it does not control another entity even though it holds more than half
of the voting rights of the other entity.
(b) it controls another entity even though it holds less than half of the
voting rights of the other entity.
(c) it is an agent or a principal (see paragraphs B58–B72 of IFRS 10).
(d) it does not have significant influence even though it holds 20 per cent
or more of the voting rights of another entity.
(e) it has significant influence even though it holds less than 20 per cent
of the voting rights of another entity.
When a parent determines that it is an investment entity in accordance
with paragraph 27 of IFRS 10, the investment entity shall disclose
information about significant judgements and assumptions it has made in
determining that it is an investment entity. If the investment entity does
not have one or more of the typical characteristics of an investment entity
(see paragraph 28 of IFRS 10), it shall disclose its reasons for concluding
that it is nevertheless an investment entity.
When an entity becomes, or ceases to be, an investment entity, it shall
disclose the change of investment entity status and the reasons for the
change. In addition, an entity that becomes an investment entity shall disclose
the effect of the change of status on the financial statements for the period
presented, including:
(a) the total fair value, as of the date of change of status, of the
subsidiaries that cease to be consolidated;
(b) the total gain or loss, if any, calculated in accordance
with paragraph B101 of IFRS 10; and
(c) the line item(s) in profit or loss in which the gain or loss is recognised
(if not presented separately).
An entity shall disclose information that enables users of its consolidated
financial statements
(a) to understand:
(i) the composition of the group; and
(ii) the interest that non-controlling interests have in the
group’s activities and cash flows (paragraph 12); and
(b) to evaluate:
(i) the nature and extent of significant restrictions on its ability
to access or use assets, and settle liabilities, of the group
(paragraph 13);
(ii) the nature of, and changes in, the risks associated with its
interests in consolidated structured entities (paragraphs
14–17);
(iii) the consequences of changes in its ownership interest in a
subsidiary that do not result in a loss of control
(paragraph 18); and
(iv) the consequences of losing control of a subsidiary during the
reporting period (paragraph 19).
When the financial statements of a subsidiary used in the preparation
of consolidated financial statements are as of a date or for a period that is
different from that of the consolidated financial statements (see paragraphs
B92 and B93 of IFRS 10), an entity shall disclose:
(a) the date of the end of the reporting period of the financial statements
of that subsidiary; and
(b) the reason for using a different date or period.
An entity shall disclose for each of its subsidiaries that have non-controlling
interests that are material to the reporting entity:
(a) the name of the subsidiary.
(b) the principal place of business (and country of incorporation if
different from the principal place of business) of the subsidiary.
(c) the proportion of ownership interests held by non-controlling
interests.
(d) the proportion of voting rights held by non-controlling interests, if
different from the proportion of ownership interests held.
(e) the profit or loss allocated to non-controlling interests of the
subsidiary during the reporting period.
(f) accumulated non-controlling interests of the subsidiary at the end of
the reporting period.
(g) summarised financial information about the subsidiary
(see paragraph B10).
An entity shall disclose:
(a) significant restrictions (eg statutory, contractual and regulatory
restrictions) on its ability to access or use the assets and settle the
liabilities of the group, such as:
(i) those that restrict the ability of a parent or its subsidiaries to
transfer cash or other assets to (or from) other entities within
the group.
(ii) guarantees or other requirements that may restrict dividends
and other capital distributions being paid, or loans and
advances being made or repaid, to (or from) other entities
within the group.
(b) the nature and extent to which protective rights of non-controlling
interests can significantly restrict the entity’s ability to access or use
the assets and settle the liabilities of the group (such as when
a parent is obliged to settle liabilities of a subsidiary before settling its
own liabilities, or approval of non-controlling interests is required
either to access the assets or to settle the liabilities of a subsidiary).
(c) the carrying amounts in the consolidated financial statements of the
assets and liabilities to which those restrictions apply.
An entity shall disclose the terms of any contractual arrangements that could
require the parent or its subsidiaries to provide financial support to a
consolidated structured entity, including events or circumstances that could
expose the reporting entity to a loss (eg liquidity arrangements or credit rating
triggers associated with obligations to purchase assets of the structured entity
or provide financial support).
If during the reporting period a parent or any of its subsidiaries has, without
having a contractual obligation to do so, provided financial or other support to
a consolidated structured entity (eg purchasing assets of or instruments issued
by the structured entity), the entity shall disclose:
(a) the type and amount of support provided, including situations in
which the parent or its subsidiaries assisted the structured entity in
obtaining financial support; and
(b) the reasons for providing the support.
If during the reporting period a parent or any of its subsidiaries has, without
having a contractual obligation to do so, provided financial or other support to
a previously unconsolidated structured entity and that provision of support
resulted in the entity controlling the structured entity, the entity shall
disclose an explanation of the relevant factors in reaching that decision.
An entity shall disclose any current intentions to provide financial or other
support to a consolidated structured entity, including intentions to assist the
structured entity in obtaining financial support.
An entity shall present a schedule that shows the effects on the equity
attributable to owners of the parent of any changes in its ownership interest
in a subsidiary that do not result in a loss of control.
An entity shall disclose the gain or loss, if any, calculated in accordance
with paragraph 25 of IFRS 10, and:
(a) the portion of that gain or loss attributable to measuring any
investment retained in the former subsidiary at its fair value at the
date when control is lost; and
(b) the line item(s) in profit or loss in which the gain or loss is recognised
(if not presented separately).
An investment entity that, in accordance with IFRS 10, is required to apply the
exception to consolidation and instead account for its investment in a
subsidiary at fair value through profit or loss shall disclose that fact.
For each unconsolidated subsidiary, an investment entity shall disclose:
(a) the subsidiary’s name;
(b) the principal place of business (and country of incorporation if
different from the principal place of business) of the subsidiary; and
(c) the proportion of ownership interest held by the investment entity
and, if different, the proportion of voting rights held.
If an investment entity is the parent of another investment entity, the parent
shall also provide the disclosures in 19B(a)–(c) for investments that are
controlled by its investment entity subsidiary. The disclosure may be provided
by including, in the financial statements of the parent, the financial statements of the subsidiary (or subsidiaries) that contain the above
information.
An investment entity shall disclose:
(a) the nature and extent of any significant restrictions (eg resulting from
borrowing arrangements, regulatory requirements or contractual
arrangements) on the ability of an unconsolidated subsidiary to
transfer funds to the investment entity in the form of cash dividends
or to repay loans or advances made to the unconsolidated subsidiary by
the investment entity; and
(b) any current commitments or intentions to provide financial or other
support to an unconsolidated subsidiary, including commitments or
intentions to assist the subsidiary in obtaining financial support.
If, during the reporting period, an investment entity or any of its subsidiaries
has, without having a contractual obligation to do so, provided financial or
other support to an unconsolidated subsidiary (eg purchasing assets of, or
instruments issued by, the subsidiary or assisting the subsidiary in obtaining
financial support), the entity shall disclose:
(a) the type and amount of support provided to each unconsolidated
subsidiary; and
(b) the reasons for providing the support.
An investment entity shall disclose the terms of any contractual arrangements
that could require the entity or its unconsolidated subsidiaries to provide
financial support to an unconsolidated, controlled, structured entity,
including events or circumstances that could expose the reporting entity to a
loss (eg liquidity arrangements or credit rating triggers associated with
obligations to purchase assets of the structured entity or to provide financial
support).
If during the reporting period an investment entity or any of its
unconsolidated subsidiaries has, without having a contractual obligation to do
so, provided financial or other support to an unconsolidated, structured entity
that the investment entity did not control, and if that provision of support
resulted in the investment entity controlling the structured entity, the
investment entity shall disclose an explanation of the relevant factors in
reaching the decision to provide that support.
An entity shall disclose information that enables users of its financial
statements to evaluate:
(a) the nature, extent and financial effects of its interests in joint
arrangements and associates, including the nature and effects of its
contractual relationship with the other investors with joint
control of, or significant influence over, joint arrangements and
associates (paragraphs 21 and 22); and
(b) the nature of, and changes in, the risks associated with its interests
in joint ventures and associates (paragraph 23).
An entity shall disclose:
(a) for each joint arrangement and associate that is material to the
reporting entity:
(i) the name of the joint arrangement or associate.
(ii) the nature of the entity’s relationship with the joint
arrangement or associate (by, for example, describing the
nature of the activities of the joint arrangement or associate
and whether they are strategic to the entity’s activities).
(iii) the principal place of business (and country of incorporation, if
applicable and different from the principal place of business) of
the joint arrangement or associate.
(iv) the proportion of ownership interest or participating share held
by the entity and, if different, the proportion of voting rights
held (if applicable).
(b) for each joint venture and associate that is material to the reporting
entity:
(i) whether the investment in the joint venture or associate is
measured using the equity methodor at fair value.
(ii) summarised financial information about the joint venture or
associate as specified in paragraphs B12 and B13.
(iii) if the joint venture or associate is accounted for using the
equity method, the fair value of its investment in the joint
venture or associate, if there is a quoted market price for the
investment.
(c) financial information as specified in paragraph B16 about the entity’s
investments in joint ventures and associates that are not individually
material:
(i) in aggregate for all individually immaterial joint ventures and,
separately,
(ii) in aggregate for all individually immaterial associates.
An investment entity need not provide the disclosures required by
paragraphs 21(b)–21(c).
An entity shall also disclose:
(a) the nature and extent of any significant restrictions (eg resulting from
borrowing arrangements, regulatory requirements or contractual
arrangements between investors with joint control of or significant
influence over a joint venture or an associate) on the ability of joint
ventures or associates to transfer funds to the entity in the form of
cash dividends, or to repay loans or advances made by the entity.
(b) when the financial statements of a joint venture or associate used in
applying the equity method are as of a date or for a period that is
different from that of the entity:
(i) the date of the end of the reporting period of the financial
statements of that joint venture or associate; and
(ii) the reason for using a different date or period.
(c) the unrecognised share of losses of a joint venture or associate, both
for the reporting period and cumulatively, if the entity has stopped
recognising its share of losses of the joint venture or associate when
applying the equity method.
An entity shall disclose:
(a) commitments that it has relating to its joint ventures separately from
the amount of other commitments as specified in paragraphs B18–B20.
(b) in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, unless the probability of loss is remote, contingent liabilities
incurred relating to its interests in joint ventures or associates
(including its share of contingent liabilities incurred jointly with other
investors with joint control of, or significant influence over, the joint
ventures or associates), separately from the amount of other
contingent liabilities.
An entity shall disclose information that enables users of its financial
statements:
(a) to understand the nature and extent of its interests in
unconsolidated structured entities (paragraphs 26–28); and
(b) to evaluate the nature of, and changes in, the risks associated with
its interests in unconsolidated structured entities (paragraphs
29–31).
The information required by paragraph 24(b) includes information about an
entity’s exposure to risk from involvement that it had with unconsolidated
structured entities in previous periods (eg sponsoring the structured entity),
even if the entity no longer has any contractual involvement with the
structured entity at the reporting date.
An investment entity need not provide the disclosures required by
paragraph 24 for an unconsolidated structured entity that it controls and for
which it presents the disclosures required by paragraphs 19A–19G.
An entity shall disclose qualitative and quantitative information about its
interests in unconsolidated structured entities, including, but not limited to,
the nature, purpose, size and activities of the structured entity and how the
structured entity is financed.
If an entity has sponsored an unconsolidated structured entity for which it
does not provide information required by paragraph 29 (eg because it does not
have an interest in the entity at the reporting date), the entity shall disclose:
(a) how it has determined which structured entities it has sponsored;
(b) income from those structured entities during the reporting period,
including a description of the types of income presented; and
(c) the carrying amount (at the time of transfer) of all assets transferred to
those structured entities during the reporting period.
An entity shall present the information in paragraph 27(b) and (c) in tabular
format, unless another format is more appropriate, and classify its sponsoring
activities into relevant categories (see paragraphs B2–B6).
An entity shall disclose in tabular format, unless another format is more
appropriate, a summary of:
(a) the carrying amounts of the assets and liabilities recognised in its
financial statements relating to its interests in unconsolidated
structured entities.
(b) the line items in the statement of financial position in which those
assets and liabilities are recognised.
(c) the amount that best represents the entity’s maximum exposure to
loss from its interests in unconsolidated structured entities, including
how the maximum exposure to loss is determined. If an entity cannot
quantify its maximum exposure to loss from its interests in
unconsolidated structured entities it shall disclose that fact and the
reasons.
(d) a comparison of the carrying amounts of the assets and liabilities of
the entity that relate to its interests in unconsolidated structured
entities and the entity’s maximum exposure to loss from those
entities.
If during the reporting period an entity has, without having a contractual
obligation to do so, provided financial or other support to an
unconsolidated structured entity in which it previously had or currently has
an interest (for example, purchasing assets of or instruments issued by the
structured entity), the entity shall disclose:
(a) the type and amount of support provided, including situations in
which the entity assisted the structured entity in obtaining financial
support; and
(b) the reasons for providing the support.
An entity shall disclose any current intentions to provide financial or other
support to an unconsolidated structured entity, including intentions to assist
the structured entity in obtaining financial support.
This appendix is an integral part of the IFRS.
income from a
structured entity
For the purpose of this IFRS, income from a structured entity
includes, but is not limited to, recurring and non-recurring
fees, interest, dividends, gains or losses on the remeasurement
or derecognition of interests in structured entities and gains or
losses from the transfer of assets and liabilities to the
structured entity.
interest in another
entity
For the purpose of this IFRS, an interest in another entity refers
to contractual and non-contractual involvement that exposes
an entity to variability of returns from the performance of the
other entity. An interest in another entity can be evidenced by,
but is not limited to, the holding of equity or debt instruments
as well as other forms of involvement such as the provision of
funding, liquidity support, credit enhancement and guarantees.
It includes the means by which an entity has control or joint
control of, or significant influence over, another entity. An
entity does not necessarily have an interest in another entity
solely because of a typical customer supplier relationship.
Paragraphs B7–B9 provide further information about interests
in other entities.
Paragraphs B55–B57 of IFRS 10 explain variability of returns.
structured entity An entity that has been designed so that voting or similar rights
are not the dominant factor in deciding who controls the
entity, such as when any voting rights relate to administrative
tasks only and the relevant activities are directed by means of
contractual arrangements.
Paragraphs B22–B24 provide further information about
structured entities.
The following terms are defined in IAS 27 (as amended in 2011), IAS 28 (as amended in
2011), IFRS 10 and IFRS 11 Joint Arrangements and are used in this IFRS with the meanings
specified in those IFRSs:
• associate
• consolidated financial statements
• control of an entity
• equity method
• group
• investment entity
• joint arrangement
• joint control
• joint operation
• joint venture
• non-controlling interest
• parent
• protective rights
• relevant activities
• separate financial statements
• separate vehicle
• significant influence
• subsidiary.
This appendix is an integral part of the IFRS. It describes the application of paragraphs 1–31 and has
the same authority as the other parts of the IFRS.
The examples in this appendix portray hypothetical situations. Although some
aspects of the examples may be present in actual fact patterns, all relevant
facts and circumstances of a particular fact pattern would need to be
evaluated when applying IFRS 12.
An entity shall decide, in the light of its circumstances, how much detail it
provides to satisfy the information needs of users, how much emphasis it
places on different aspects of the requirements and how it aggregates the
information. It is necessary to strike a balance between burdening financial
statements with excessive detail that may not assist users of financial
statements and obscuring information as a result of too much aggregation.
An entity may aggregate the disclosures required by this IFRS for interests in
similar entities if aggregation is consistent with the disclosure objective and
the requirement in paragraph B4, and does not obscure the information
provided. An entity shall disclose how it has aggregated its interests in similar
entities.
An entity shall present information separately for interests in:
(a) subsidiaries;
(b) joint ventures;
(c) joint operations;
(d) associates; and
(e) unconsolidated structured entities.
In determining whether to aggregate information, an entity shall consider
quantitative and qualitative information about the different risk and return
characteristics of each entity it is considering for aggregation and the
significance of each such entity to the reporting entity. The entity shall
present the disclosures in a manner that clearly explains to users of financial
statements the nature and extent of its interests in those other entities.
Examples of aggregation levels within the classes of entities set out in
paragraph B4 that might be appropriate are:
(a) nature of activities (eg a research and development entity, a revolving
credit card securitisation entity).
(b) industry classification.
(c) geography (eg country or region).
An interest in another entity refers to contractual and non-contractual
involvement that exposes the reporting entity to variability of returns from
the performance of the other entity. Consideration of the purpose and design
of the other entity may help the reporting entity when assessing whether it
has an interest in that entity and, therefore, whether it is required to provide
the disclosures in this IFRS. That assessment shall include consideration of the
risks that the other entity was designed to create and the risks the other
entity was designed to pass on to the reporting entity and other parties.
A reporting entity is typically exposed to variability of returns from the
performance of another entity by holding instruments (such as equity or debt
instruments issued by the other entity) or having another involvement that
absorbs variability. For example, assume a structured entity holds a loan
portfolio. The structured entity obtains a credit default swap from another
entity (the reporting entity) to protect itself from the default of interest and
principal payments on the loans. The reporting entity has involvement that
exposes it to variability of returns from the performance of the structured
entity because the credit default swap absorbs variability of returns of the
structured entity.
Some instruments are designed to transfer risk from a reporting entity to
another entity. Such instruments create variability of returns for the other
entity but do not typically expose the reporting entity to variability of returns
from the performance of the other entity. For example, assume a structured
entity is established to provide investment opportunities for investors who
wish to have exposure to entity Z’s credit risk (entity Z is unrelated to any
party involved in the arrangement). The structured entity obtains funding by
issuing to those investors notes that are linked to entity Z’s credit risk
(credit-linked notes) and uses the proceeds to invest in a portfolio of risk-free
financial assets. The structured entity obtains exposure to entity Z’s credit risk
by entering into a credit default swap (CDS) with a swap counterparty. The
CDS passes entity Z’s credit risk to the structured entity in return for a fee
paid by the swap counterparty. The investors in the structured entity receive a
higher return that reflects both the structured entity’s return from its asset
portfolio and the CDS fee. The swap counterparty does not have involvement
with the structured entity that exposes it to variability of returns from the
performance of the structured entity because the CDS transfers variability to
the structured entity, rather than absorbing variability of returns of the
structured entity.
For each subsidiary that has non-controlling interests that are material to the
reporting entity, an entity shall disclose:
(a) dividends paid to non-controlling interests.
(b) summarised financial information about the assets, liabilities, profit or
loss and cash flows of the subsidiary that enables users to understand
the interest that non-controlling interests have in the group’s activities
and cash flows. That information might include but is not limited to,
for example, current assets, non-current assets, current liabilities,
non-current liabilities, revenue, profit or loss and total comprehensive
income.
The summarised financial information required by paragraph B10(b) shall be
the amounts before inter-company eliminations.
For each joint venture and associate that is material to the reporting entity, an
entity shall disclose:
(a) dividends received from the joint venture or associate.
(b) summarised financial information for the joint venture or associate
(see paragraphs B14 and B15) including, but not necessarily limited to:
(i) current assets.
(ii) non-current assets.
(iii) current liabilities.
(iv) non-current liabilities.
(v) revenue.
(vi) profit or loss from continuing operations.
(vii) post-tax profit or loss from discontinued operations.
(viii) other comprehensive income.
(ix) total comprehensive income.
In addition to the summarised financial information required by
paragraph B12, an entity shall disclose for each joint venture that is material
to the reporting entity the amount of:
(a) cash and cash equivalents included in paragraph B12(b)(i).
(b) current financial liabilities (excluding trade and other payables and
provisions) included in paragraph B12(b)(iii).
(c) non-current financial liabilities (excluding trade and other payables
and provisions) included in paragraph B12(b)(iv).
(d) depreciation and amortisation.
(e) interest income.
(f) interest expense.
(g) income tax expense or income.
The summarised financial information presented in accordance
with paragraphs B12 and B13 shall be the amounts included in the IFRS
financial statements of the joint venture or associate (and not the entity’s
share of those amounts). If the entity accounts for its interest in the joint
venture or associate using the equity method:
(a) the amounts included in the IFRS financial statements of the joint
venture or associate shall be adjusted to reflect adjustments made by
the entity when using the equity method, such as fair value
adjustments made at the time of acquisition and adjustments for
differences in accounting policies.
(b) the entity shall provide a reconciliation of the summarised financial
information presented to the carrying amount of its interest in the
joint venture or associate.
An entity may present the summarised financial information required by
paragraphs B12 and B13 on the basis of the joint venture’s or associate’s
financial statements if:
(a) the entity measures its interest in the joint venture or associate at fair
value in accordance with IAS 28 (as amended in 2011); and
(b) the joint venture or associate does not prepare IFRS financial
statements and preparation on that basis would be impracticable or
cause undue cost.
In that case, the entity shall disclose the basis on which the summarised
financial information has been prepared.
An entity shall disclose, in aggregate, the carrying amount of its interests in
all individually immaterial joint ventures or associates that are accounted for
using the equity method. An entity shall also disclose separately the aggregate
amount of its share of those joint ventures’ or associates’:
(a) profit or loss from continuing operations.
(b) post-tax profit or loss from discontinued operations.
(c) other comprehensive income.
(d) total comprehensive income.
An entity provides the disclosures separately for joint ventures and associates.
When an entity’s interest in a subsidiary, a joint venture or an associate (or a
portion of its interest in a joint venture or an associate) is classified (or
included in a disposal group that is classified) as held for sale in accordance
with IFRS 5, the entity is not required to disclose summarised financial
information for that subsidiary, joint venture or associate in accordance with
paragraphs B10–B16.
(b) unrecognised commitments to acquire another party’s ownership
interest (or a portion of that ownership interest) in a joint venture if a
particular event occurs or does not occur in the future.
The requirements and examples in paragraphs B18 and B19 illustrate some of
the types of disclosure required by paragraph 18 of IAS 24 Related Party
Disclosures.
A structured entity is an entity that has been designed so that voting or
similar rights are not the dominant factor in deciding who controls the entity,
such as when any voting rights relate to administrative tasks only and the
relevant activities are directed by means of contractual arrangements.
A structured entity often has some or all of the following features or
attributes:
(a) restricted activities.
(b) a narrow and well-defined objective, such as to effect a tax-efficient
lease, carry out research and development activities, provide a source
of capital or funding to an entity or provide investment opportunities
for investors by passing on risks and rewards associated with the assets
of the structured entity to investors.
(c) insufficient equity to permit the structured entity to finance its
activities without subordinated financial support.
(d) financing in the form of multiple contractually linked instruments to
investors that create concentrations of credit or other risks (tranches).
Examples of entities that are regarded as structured entities include, but are
not limited to:
(a) securitisation vehicles.
(b) asset-backed financings.
(c) some investment funds.
An entity that is controlled by voting rights is not a structured entity simply
because, for example, it receives funding from third parties following a
restructuring.
In addition to the information required by paragraphs 29–31, an entity shall
disclose additional information that is necessary to meet the disclosure
objective in paragraph 24(b).
Examples of additional information that, depending on the circumstances,
might be relevant to an assessment of the risks to which an entity is exposed
when it has an interest in an unconsolidated structured entity are:
(a) the terms of an arrangement that could require the entity to provide
financial support to an unconsolidated structured entity (eg liquidity
arrangements or credit rating triggers associated with obligations to
purchase assets of the structured entity or provide financial support),
including:
(i) a description of events or circumstances that could expose the
reporting entity to a loss.
(ii) whether there are any terms that would limit the obligation.
(iii) whether there are any other parties that provide financial
support and, if so, how the reporting entity’s obligation ranks
with those of other parties.
(b) losses incurred by the entity during the reporting period relating to its
interests in unconsolidated structured entities.
(c) the types of income the entity received during the reporting period
from its interests in unconsolidated structured entities.
(d) whether the entity is required to absorb losses of an unconsolidated
structured entity before other parties, the maximum limit of such
losses for the entity, and (if relevant) the ranking and amounts of
potential losses borne by parties whose interests rank lower than the
entity’s interest in the unconsolidated structured entity.
(e) information about any liquidity arrangements, guarantees or other
commitments with third parties that may affect the fair value or risk
of the entity’s interests in unconsolidated structured entities.
(f) any difficulties an unconsolidated structured entity has experienced in
financing its activities during the reporting period.
(g) in relation to the funding of an unconsolidated structured entity, the
forms of funding (eg commercial paper or medium-term notes) and
their weighted-average life. That information might include maturity
analyses of the assets and funding of an unconsolidated structured
entity if the structured entity has longer-term assets funded by
shorter-term funding.
This appendix is an integral part of the IFRS and has the same authority as the other parts of the
IFRS.
An entity shall apply this IFRS for annual periods beginning on or after
1 January 2013. Earlier application is permitted.
Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in
Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12),
issued in June 2012, added paragraphs C2A–C2B. An entity shall apply those
amendments for annual periods beginning on or after 1 January 2013. If an
entity applies IFRS 12 for an earlier period, it shall apply those amendments
for that earlier period.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), issued in
October 2012, amended paragraph 2 and Appendix A, and added paragraphs
9A–9B, 19A–19G, 21A and 25A. An entity shall apply those amendments for
annual periods beginning on or after 1 January 2014. Early adoption is
permitted. If an entity applies those amendments earlier, it shall disclose that
fact and apply all amendments included in Investment Entities at the same time.
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10,
IFRS 12 and IAS 28), issued in December 2014, amended paragraph 6. An
entity shall apply that amendment for annual periods beginning on or after
1 January 2016. Earlier application is permitted. If an entity applies that
amendment for an earlier period it shall disclose that fact.
Annual Improvements to IFRS Standards 2014–2016 Cycle, issued in December
2016, added paragraph 5A and amended paragraph B17. An entity shall apply
those amendments retrospectively in accordance with IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors for annual periods beginning on or
after 1 January 2017.
An entity is encouraged to provide information required by this IFRS earlier
than annual periods beginning on or after 1 January 2013. Providing some of
the disclosures required by this IFRS does not compel the entity to comply
with all the requirements of this IFRS or to apply IFRS 10, IFRS 11, IAS 27 (as
amended in 2011) and IAS 28 (as amended in 2011) early.
The disclosure requirements of this IFRS need not be applied for any period
presented that begins before the annual period immediately preceding the
first annual period for which IFRS 12 is applied.
The disclosure requirements of paragraphs 24–31 and the corresponding
guidance in paragraphs B21–B26 of this IFRS need not be applied for any
period presented that begins before the first annual period for which IFRS 12
is applied.
If an entity applies this IFRS but does not yet apply IFRS 9, any reference to
IFRS 9 shall be read as a reference to IAS 39 Financial Instruments: Recognition and
Measurement.
This appendix sets out amendments to other IFRSs that are a consequence of the Board issuing
IFRS 12. An entity shall apply the amendments for annual periods beginning on or after 1 January
2013. If an entity applies IFRS 12 for an earlier period, it shall apply the amendments for that earlier
period. Amended paragraphs are shown with new text underlined and deleted text struck through.
* * * * *
The amendments contained in this appendix when this IFRS was issued in 2011 have been
incorporated into the relevant IFRSs published in this volume.
International Financial Reporting Standard 12 Disclosure of Interests in Other Entities was
approved for issue by the fifteen members of the International Accounting Standards
Board.
Sir David Tweedie Chairman
Stephen Cooper
Philippe Danjou
Jan Engström
Patrick Finnegan
Amaro Luiz de Oliveira Gomes
Prabhakar Kalavacherla
Elke König
Patricia McConnell
Warren J McGregor
Paul Pacter
Darrel Scott
John T Smith
Tatsumi Yamada
Wei-Guo Zhang
Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities:
Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) 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
Jan Engström
Patrick Finnegan
Amaro Luiz de Oliveira Gomes
Prabhakar Kalavacherla
Patricia McConnell
Takatsugu Ochi
Paul Pacter
Darrel Scott
John T Smith
Wei-Guo Zhang
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) was approved for issue by
the fifteen members of the International Accounting Standards Board.
Hans Hoogervorst Chairman
Ian Mackintosh Vice-Chairman
Stephen Cooper
Philippe Danjou
Martin Edelmann
Jan Engström
Patrick Finnegan
Amaro Luiz de Oliveira Gomes
Prabhakar Kalavacherla
Patricia McConnell
Takatsugu Ochi
Paul Pacter
Darrel Scott
Chungwoo Suh
Zhang Wei-Guo
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