In a joint submission CA ANZ and CPA Australia have provided feedback to the IASB’s post implementation review (PIR) of its suite of standards dealing with investments in other entities, IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. These standards became operational from 1 January 2013, introducing the control model as the basis of consolidation in IFRS 10 and the requirement to equity account joint ventures in IFRS 11, both of which were major shifts in accounting practice at the time. Now the standards are well established, the IASB’s review process sought stakeholder views on whether the suite’s objectives have been met, the requirements are capable of consistent application and that benefits to users outweigh costs of implementation.

The feedback we received from members and other stakeholders was that the standards are generally working well in practice and meeting their objectives. However, their principles-based nature can mean they require the application of significant levels of judgement. We therefore recommended that the IASB provide more comprehensive guidance, via a more sophisticated suite of examples, to ensure the application of the principles to complex fact patterns is being performed consistently.

Our feedback also identified some specific areas where the principles are lacking, inconsistent or unclear, recommending the IASB revisit these areas to provide greater clarity in the requirements.