The IASB has postponed the effective date of its 2014 Amendments 'Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS 28’. A new effective date has not yet been determined. Despite this change, the 2014 Amendments may still be adopted early if entities wish to do so.
‘Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS 28’ was issued in 2014 and addressed an acknowledged inconsistency between IFRS 10 and IAS 28 relating to how to account for transactions in which a parent entity loses control of a subsidiary by contributing it to an associate or joint venture.
The 2014 Amendments required entities to recognise:
- A full gain or loss when a transfer to an associate or a joint venture involves a business; and
- A partial gain or loss if the asset transferred does not contain a business. The gain or loss that is not recognised is eliminated against the cost of the investment in the associate or joint venture.