In a paper for the March issue of the journal titled IFRS in Practice, Stanislav Antonov, Director of Audit for High-Tech Companies at FBK, analyses a recent exposure draft of amendments to IAS 28 Investments in Associates and Joint Ventures prepared by the IASB. The author delves into the reasons why the changes are being introduced on an accelerated basis, how they resolve conflicts with the new IFRS 18 standard, and which entities—primarily insurers and investment companies—will be able to reassess their approach to accounting for investments in associates and joint ventures.
The paper examines key innovations: the expansion of the entities eligible to elect the fair value option, the clarification of the ‘main business activity’ concept, and the practical implications for financial reporting. The author draws on an example of an insurer investing in a technology startup—both before and after the amendments take effect.
‘The amendments do not merely ensure the standards are consistent on a technical level—they provide businesses with legal certainty and allow them to reflect the economic substance of transactions, rather than to be constrained by outdated wording,’ the author point out.
Read the article to find out more about who will be able to apply the new rules as early as 2027, what decisions need to be made now, and how to properly document the chosen accounting method in the accounting policy.
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