IASB Proposes Amendments to IAS 28 Fair Value Option

Posted 14 April 2026 Written by Acts Online
Category Accounting Standards

Brought to you by SA Accounting Academy: The International Accounting Standards Board (IASB) has published an Exposure Draft proposing narrow-scope amendments to IAS 28 Investments in Associates and Joint Ventures. The proposals seek to clarify the application of the fair value option for specific investment-focused entities.

In terms of the current IAS 28, paragraph 18, certain entities—including venture capital organisations, mutual funds, unit trusts, and similar entities—are permitted to elect to measure investments in associates and joint ventures at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. The proposed amendments aim to address diversity in practice regarding the timing and scope of this election.

The key aspects of the Exposure Draft include:

  • Clarification on whether the election to use the fair value option must be made upon initial recognition of the investment.
  • Guidance on the application of the election on an investment-by-investment basis.
  • Consistency requirements for entities that are not themselves investment entities but hold interests in associates or joint ventures through subsidiaries that are investment entities.

The IASB is seeking comments from stakeholders, including preparers, auditors, and users of financial statements, to ensure the proposed changes improve the comparability and transparency of financial reporting. The comment period for such drafts typically remains open for 120 days from the date of publication to allow for global professional feedback.

Click here to view the announcement on the IFRS Foundation project page.

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge regarding the interaction between IAS 28 and IFRS 9 to correctly advise on the accounting treatment of significant influence investments.
  • For your business: Your firm should review audit and accounting methodologies for clients in the venture capital or fund management sectors to ensure compliance with the proposed election criteria for fair value measurement.
  • For your clients: Investment-focused clients may gain greater clarity on whether they can avoid the complexity of the equity method by opting for fair value measurement, which may impact reported asset volatility and valuation disclosures.

Originally published at https://accountingacademy.co.za/news/read/iasb-exposure-draft-proposed-amendments-to-fair-value-option-in-ias-28-re-investments-in-associates-and-joint-ventures-2

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