IAS 28 Investments in Associates and Joint Ventures

Synopsis

IAS 28 prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.

An associate is an entity over which the investor has significant influence. A shareholding of 20% or more of an entity is presumed to result in significant influence, although where a shareholding is less than this, significant influence can be established by other means.

In the consolidated financial statements, equity accounting is applied to investments in associates and joint ventures:

• In the consolidated statement of financial position the investment is initially carried at cost and subsequently adjusted for the investor’s share of profits or losses and other comprehensive income made by the investee. Distributions received from the investee reduce the carrying value of the investment.
• The investor’s share of the investee’s profit or loss and other comprehensive income are reported in the consolidated statement of profit or loss and other comprehensive income.

IAS 28 does not include any disclosure requirements; these are included in IFRS 12 Disclosure of Interests in Other Entities. 

• Read the unaccompanied version of IAS 28

The International Accounting Standards Board (IASB) provides free access to the consolidated unaccompanied international accounting standards for the current year through its website. Free registration is required.

This unaccompanied version does not include additional content that accompanies the full standard, such as illustrative examples, implementation guidance and bases for conclusions.

Which version of the standard?

Financial Reporting Faculty members who joined the faculty prior to 1 November 2022 have premium access to the consolidated edition of IFRS and amendments through the IASB's IFRS Standards Navigator service. Please log into IFRS Standards Navigator to access electronic versions of the standards through these links.

Please be aware that as part of the changes to ICAEW faculty membership, this service will be withdrawn after 31 December 2022.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

The following interpretation refers to IAS 28

• IFRIC 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

Provides guidance on how a contributor to a decommissioning fund should account for its interest in a fund.

Current proposals

The Board moved a project on Equity Accounting from its research pipeline to its research programme in October 2020. The project will address application problems identified by the Interpretations Committee relating to the interaction between equity accounting as required by IAS 28 and other methods of accounting for investments in other entities.

Other resources

Factsheets

• Interests in Other Entities
  Provides more information on the standard.
• 2019 IFRS Accounts
  Provides more information on Long-term Interests in Associates and Joint Ventures.

This page was last updated 30 August 2022.