On 17 January 2025, EFRAG published its final comment letter, on the IASB Exposure Draft, Equity Method of Accounting Investments in Associates and Joint Ventures.
EFRAG expressed supports for the ED’s proposals regarding the measurement of cost of an associate or joint venture (investee), transactions between an investor and its investees, disclosures, and impairment indicators.
However, EFRAG also raised several concerns and issued the following key recommendations:
• Simplification of the proposed layered approach for step acquisitions of an investee;
• Development of a holistic, principle-based solution for non-exchange changes in ownership interests in an investee;
• Exemption of transactions with equity-accounted subsidiaries from the ED’s proposals for separate financial statements; and
• Modification and clarification of the proposed transition requirements.
Importantly, EFRAG has also addressed insurers’ concerns in paragraphs 122 to 125 of its comment letter.
For your convenience, you can access EFRAG’s final comment letter here.
Insurance Europe