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IASB amends fair value option for investments in associates and JVs
The IASB issued amendments to IAS 28 to clarify which investments in associates and joint ventures (JVs) qualify for the fair value option.
The amendments to IAS 28 Investments in Associates and Joint Ventures respond to stakeholder feedback highlighting diversity in practice in applying the fair value option and how this interacts with the classification requirements introduced by IFRS 18 Presentation and Disclosure in Financial Statements.
On initial application of IFRS 18, eligible entities may elect to change the measurement for investments in associates or joint ventures from the equity method to fair value through profit or loss in accordance with IFRS 9 Financial Instruments.
The changes provide clarity before IFRS 18 takes effect, helping entities to assess the implications of their measurement elections and classification outcomes. Insurers and other entities may benefit from more consistent classification of income and expenses from these investments and related liabilities.