IFRS 1 Amendments - Cost of an Investment in a Subsidiary in the Separate Financial Statements of a Parent on First Time Adoption of IFRSs

In March 2006, the Board added a project to its technical agenda to resolve issues relating to the cost of an investment in a subsidiary in the separate financial statements of a parent on first time adoption of IFRSs.

In some jurisdictions, the accounting for investments in subsidiaries in the separate financial statements of a parent has not been in accordance with IAS 27. In these circumstances, on transition to IFRS, it is difficult to restate the cost of these investments to be compliant with IAS 27.

The purpose of the project is to identify a suitable exemption to restating cost in accordance with IAS 27 in circumstances where it is difficult to do so. In May 2006, the staff presented the Board with several options to resolve these issues. The Board has requested further analysis on one potential option.

The project has subsequently been re-exposed and re-labled to IFRS 1 and IAS 27 Amendments - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate