Post-implementation Review
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
June 2022
Project Report and Feedback Statement
IFRS Accounting Standards
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 2
Post-implementation Review
The International Accounting Standards Board (IASB) conducts post-implementation reviews of new
IFRSAccounting Standards or major amendments to IFRS Accounting Standards to assess the effects of the
requirements on users of nancial statements, preparers and auditors.
This Project Report and Feedback Statement (Report) summarises the work completed and conclusions
reached in the Post-implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements and IFRS 12 Disclosure of Interests in Other Entities (Post-implementation Review).
Contents
from page
At a glance 3
Introduction 4
First phase—Identifying matters to be examined 6
Second phase—Summary of ndings and the IASB’s response 7
Appendix A—Questions in the Request for Information 10
Appendix B—How evidence was gathered 14
Appendix C—Feedback summary and the IASB’s responses 17
Appendix D—Time line of the Post-implementation Review 27
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 3
At a glance
The IASB conducted a Post-implementation Review of IFRS 10 Consolidated Financial Statements,
IFRS11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities between 2019
and2022.
The objective of the Post-implementation Review was to assess the effects of the requirements in the
Standards on users of nancial statements, preparers and auditors.
The IASB’s conclusions on the Post-implementation Review
Based on its analysis of the evidence gathered in the Post-implementation Review, the IASB concluded that
the requirements of IFRS 10, IFRS 11 and IFRS 12 are working as intended. In particular, the IASB concluded
the Standards are meeting their objectives and that:
• IFRS 10—using the control model as the single basis for consolidation, including guidance for applying that
model to situations in which it can be difficult for an entity to assess control, enables entities to determine
whether they control another entity.
• IFRS 11—the classication of a joint arrangement based on a party’s rights and obligations provides
a faithful representation of an entity’s interest in a joint arrangement. IFRS 11 overcomes previous
impediments to nancial reporting that classied joint arrangements based on legal structure and permitted
an entity a choice in accounting for jointly controlled entities.
• IFRS 12—the information required by IFRS 12 enables users of nancial statements to evaluate the
nature of, and risks associated with, the entity’s interests in other entities, including subsidiaries, joint
arrangements, associates and structured entities; and the effects of those interests on the entity’s nancial
position, nancial performance and cash ows.
• no unexpected costs arose when applying or enforcing the requirements of IFRS 10, IFRS 11 and IFRS 12,
nor when using or auditing information the Standard requires an entity to provide.
Outcomes of the Post-implementation Review
Applying the approach on pages 7–8 of this Report, the IASB assessed none of the matters arising from the
Post-implementation Review to be of high or medium priority. The IASB assessed ve matters to be of low
priority and these could be explored if identied as priorities in the next agenda consultation:
1
• subsidiaries that are investment entities;
• transactions that change the relationship between an investor and an investee;
• transactions that involve ‘corporate wrappers’;
• collaborative arrangements outside the scope of IFRS 11; and
• additional disclosures about interests in other entities.
The IASB decided no further action was required on other matters identied in the Post-implementation Review.
1 The next agenda consultation will be the IASB’s fourth agenda consultation.
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 4
Introduction
Post-implementation reviews
A post-implementation review is a mandatory step in the IFRS Foundation's due process. The International
Accounting Standards Board (IASB) is required to conduct a post-implementation review of each new IFRS
Accounting Standard or major amendment to an IFRS Accounting Standard. These reviews help the IASB to
assess the effects of requirements on users of nancial statements, preparers and auditors.
The IFRS Foundation’s Due Process Handbook states that a post-implementation review has two phases:
• the rst phase, which involves identifying and assessing matters to be examined, which then become the
subject of a public consultation in a request for information.
• the second phase, in which the IASB considers the responses to the request for information along with
the information it has gathered through other consultative and research activities. These activities include
meetings with stakeholders and a review of relevant research, including academic literature, on the effect of
applying the IFRS Accounting Standard to nancial reporting.
A post-implementation review ends when the IASB presents its ndings and sets out the steps it plans to take,
if any, as a result of the review.
Purpose of a post-implementation review
In a post-implementation review, the IASB aims to assess whether:
• an entity applying the requirements in an IFRS Accounting Standard produces nancial statements that
faithfully portray the entity’s nancial position and performance, and whether this information helps users of
nancial statements to make informed economic decisions;
• areas of the IFRS Accounting Standard pose challenges;
• areas of the IFRS Accounting Standard could result in inconsistent application; and
• unexpected costs arise when applying or enforcing the requirements in the IFRS Accounting Standard, or
when using or auditing information the IFRS Accounting Standard requires an entity to provide.
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Introduction continued...
The IASB’s objectives when issuing IFRS 10, IFRS 11 and IFRS 12
The IASB’s objectives when issuing IFRS 10, IFRS 11 and IFRS 12 were to:
• develop a control model as the single basis for consolidation and robust guidance for applying that control
model to situations in which it proved difficult for an entity to assess control;
• establish an accounting principle to reect the rights and obligations that parties have as a result of their
interests in joint arrangements; and
• enable users of nancial statements to evaluate the nature of and risks associated with an entity’s interests in
other entities, including subsidiaries, joint arrangements, associates and structured entities; and to evaluate
the effects of those interests on the entity’s nancial position, nancial performance and cash ows.
Time line of the Post-implementation Review
The time line of the Post-implementation Review is presented in Appendix D of this Report.
More information about the project
More information about the project, including recordings of public meetings, is available on the
IFRSFoundation’s website.
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First phase—Identifying matters to
beexamined
Identifying matters to be examined
In the rst phase of the Post-implementation Review the IASB identied matters to be examined in a Request
for Information. To identify matters the IASB:
• reviewed materials published alongside IFRS 10, IFRS 11 and IFRS 12 and after issuing IFRS 10, IFRS 11
and IFRS 12, including Agenda Decisions issued by the IFRS Interpretations Committee (Committee);
• held more than 20 meetings to consult with stakeholders and other consultative bodies; and
• reviewed academic research and other literature.
2
2 For further details, see Agenda Paper 7A Findings from the rst phase and determining the next step and Agenda Paper 7C Work undertaken in the
rst phase from the April 2020 meeting of the International Accounting Standards Board (IASB).
Feedback from the rst phase
Feedback from the rst phase of the Post-implementation Review demonstrated that stakeholders:
• agreed with using the control model as the single basis for consolidation. Some stakeholders said that,
sometimes, applying the requirements of IFRS 10 involves signicant judgement and reaching a conclusion
can prove challenging. For example, challenges can arise when the information available to the entity could
lead to several conclusions, or when an entity or other party is uncertain whether a right or obligation exists.
• supported the principle in IFRS 11, though some stakeholders raised concerns about the classication of
joint arrangements in specic situations, and the accounting requirements for joint operations.
There was little feedback on the disclosure requirements of IFRS 12 in the rst phase of the
Post-implementation Review.
Based on feedback from the rst phase, the IASB identied questions to be included in the Request for
Information. The IASB asked questions about matters it wanted more information on. For example, the IASB
asked how frequently a party to a joint arrangement needs to consider other facts and circumstances to
determine the classication of a joint arrangement.
Appendix A of this Report sets out the questions asked in the Request for Information.
Auditors Standard-
setters
Users
Preparers
Academics Regulators
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Second phase—Summary of ndings and
the IASB’s response
Gathering evidence
In the second phase of the Post-implementation Review, the IASB gathered evidence on the matters in the
Request for Information. The IASB relied on three main sources of evidence:
• public consultation via the Request for Information;
• meeting with stakeholders; and
• reviewing academic research.
3
The IASB also examined disclosures provided by entities applying IFRS 12 in a limited desk-based review of
nancial statements.
Appendix B of this Report summarises how the IASB gathered evidence in the second phase of the Post-
implementation Review.
Approach to assessing evidence
For this Post-implementation Review the IASB applied the following approach to identifying and prioritising
matters arising in the second phase of the Post-implementation Review. The IASB assessed:
• whether matters warrant further action; and
• how such matters should be prioritised.
Assessing whether matters warrant further action
The IASB decided it would act on matters arising from a post-implementation review when the ndings provide
evidence that:
• the objective of the new IFRS Accounting Standard is not being met;
• there is a signicant deciency in how information arising from applying the new IFRS Accounting Standard
meets the needs of users of nancial statements (for example, signicant diversity in application); and/or
• the costs or challenges of applying the new IFRS Accounting Standard or auditing, enforcing or using
information arising from applying the new IFRS Accounting Standard are signicantly greater than
expected (for example, there is a signicant difference between the actual effects of applying the new
IFRSAccounting Standard and the expected effects as described in the effects analysis published with the
new IFRS Accounting Standard).
3 For further details, see Agenda Paper 7D Academic literature review update from the July 2021 IASB meeting.
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Second phase—Summary of ndings and
the IASB’s response continued...
Assessing the priority of the matters that warrant further action
The IASB decided it would prioritise matters arising from this Post-implementation Review based on the
characteristics of the matter—that is, the extent to which:
• the matter has substantial consequences.
• the matter is pervasive.
• the IASB or the Committee can respond to the matter.
• the benets of any action would be expected to outweigh the costs. To determine this, the IASB would
consider the extent of disruption and operational costs resulting from change and the importance of the
matter to users of nancial statements.
The IASB classied matters arising in the second phase based on the characteristics for prioritisation, as set
out in Table 1:
Table 1—Prioritisation of matters raised
Priority When to act To what extent the characteristics are present
High As soon as
possible
Matters that:
• relate to the objective or core principle of the new IFRS Accounting
Standard and result in the IASB being unable to conclude that the
new IFRS Accounting Standard is working as intended; or
• require an urgent solution.
Medium Add to the
research
pipeline
Matters that exhibit most of the characteristics required to qualify as
priorities and for which the benets of responding to the matter are
expected to exceed the costs.
Low Explore if
identied as a
priority in the
next agenda
consultation
Matters that:
• exhibit some of the characteristics required to qualify as priorities;
and
• omit other characteristics required to qualify as priorities or
lack enough information for the IASB to conclude whether such
characteristics are present.
No action Not applicable Matters that exhibit few or none of the characteristics required to qualify
as priorities.
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Second phase—Summary of ndings and
the IASB’s response continued...
Overall conclusion
The IASB concluded that IFRS 10, IFRS 11 and IFRS 12 are working as intended after considering the
evidence gathered in the second phase of the Post-implementation Review.
Outcomes
Applying the approach on pages 7–8 of this Report, the IASB assessed none of the matters arising from the
Post-implementation Review to be of high or medium priority. The IASB assessed ve matters to be of low
priority and these could be explored if identied as priorities in the next agenda consultation. These are:
• subsidiaries that are investment entities;
• transactions that change the relationship between an investor and an investee;
• transactions that involve ‘corporate wrappers’;
• collaborative arrangements outside the scope of IFRS 11; and
• additional disclosures about interests in other entities.
The IASB’s response to the low-priority matters is set out in Appendix C of this Report.
The IASB decided no further action was required on other matters identied in the Post-implementation
Review. The IASB observed that:
• if stakeholders need further guidance they are encouraged to submit application questions meeting the
submission criteria to the Committee; and
• other matters exhibited few or none of the characteristics required to qualify as priorities, for example,
the IASB noted that only a few respondents raised a concern about IFRS 11 eliminating proportionate
consolidation for joint ventures.
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Appendix A—Questions in the Request
forInformation
Table A1—Questions in the Request for Information
Number Questions in the Request for Information
1 To understand whether groups of stakeholders share similar views, the IASB would like to know:
(a) your principal role in relation to nancial reporting. Are you a user or a preparer of
nancial statements, an auditor, a regulator, a standard-setter or an academic? Do you
represent a professional accounting body? If you are a user of nancial statements, what
kind of user are you, for example, are you a buy-side analyst, sell-side analyst, credit
rating analyst, creditor or lender, or asset or portfolio manager?
(b) your principal jurisdiction and industry. For example, if you are a user of nancial
statements, which regions do you follow or invest in? Please state whether your
responses to questions 2–10 are unrelated to your principal jurisdiction or industry.
2(a) In your experience:
(i) to what extent does applying paragraphs 10–14 and B11–B13 of IFRS 10 enable an
investor to identify the relevant activities of an investee?
(ii) are there situations in which identifying the relevant activities of an investee poses a
challenge, and how frequently do these situations arise? In these situations, what other
factors are relevant to identifying the relevant activities?
2(b) In your experience:
(i) to what extent does applying paragraphs B26–B33 of IFRS 10 enable an investor to
determine if rights are protective rights?
(ii) to what extent does applying paragraphs B22–B24 of IFRS 10 enable an investor
to determine if rights (including potential voting rights) are, or have ceased to be,
substantive?
2(c) In your experience:
(i) to what extent does applying paragraphs B41–B46 of IFRS 10 to situations in which the
other shareholdings are widely dispersed enable an investor that does not hold a majority
of the voting rights to make an appropriate assessment of whether it has acquired (or
lost) the practical ability to direct an investee’s relevant activities?
(ii) how frequently does the situation in which an investor needs to make the assessment
described in question 2(c)(i) arise?
(iii) is the cost of obtaining the information required to make the assessment signicant?
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Appendix A—Questions in the Request
forInformation continued...
Table A1—Questions in the Request for Information
Number Questions in the Request for Information
3(a) In your experience:
(i) to what extent does applying the factors listed in paragraph B60 of IFRS 10 (and the
application guidance in paragraphs B62–B72 of IFRS 10) enable an investor to determine
whether a decision maker is a principal or an agent?
(ii) are there situations in which it is challenging to identify an agency relationship? If yes,
please describe the challenges that arise in these situations.
(iii) how frequently do these situations arise?
3(b) In your experience:
(i) to what extent does applying paragraphs B73–B75 of IFRS 10 enable an investor to
assess whether control exists because another party is acting as a de facto agent (ie in
the absence of a contractual arrangement between the parties)?
(ii) how frequently does the situation in which an investor needs to make the assessment
described in question 3(b)(i) arise?
(iii) please describe the situations that give rise to such a need.
4(a) In your experience:
(i) to what extent does applying the denition (paragraph 27 of IFRS 10) and the description
of the typical characteristics of an investment entity (paragraph 28 of IFRS 10) lead
to consistent outcomes? If you have found that inconsistent outcomes arise, please
describe these outcomes and explain the situations in which they arise.
(ii) to what extent does the denition and the description of typical characteristics result in
classication outcomes that, in your view, fail to represent the nature of the entity in a
relevant or faithful manner? For example, do the denition and the description of typical
characteristics include entities in (or exclude entities from) the category of investment
entities that in your view should be excluded (or included)? Please provide the reasons
for your answer.
4(b) In your experience:
(i) are there situations in which requiring an investment entity to measure at fair value
its investment in a subsidiary that is an investment entity itself results in a loss of
information? If so, please provide details of the useful information that is missing and
explain why you think that information is useful.
(ii) are there criteria, other than those in paragraph 32 of IFRS 10, that may be relevant to the
scope of application of the consolidation exception for investment entities?
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Appendix A—Questions in the Request
forInformation continued...
Table A1—Questions in the Request for Information
Number Questions in the Request for Information
5(a) In your experience:
(i) how frequently do transactions, events or circumstances arise that:
(a) alter the relationship between an investor and an investee (for example, a change
from being a parent to being a joint operator); and
(b) are not addressed in IFRS Accounting Standards?
(ii) how do entities account for these transactions, events or circumstances that alter the
relationship between an investor and an investee?
(iii) in transactions, events or circumstances that result in a loss of control, does remeasuring
the retained interest at fair value provide relevant information? If not, please explain why
not, and describe the relevant transactions, events or circumstances.
5(b) In your experience:
(i) how do entities account for transactions in which an investor acquires control of
a subsidiary that does not constitute a business, as dened in IFRS 3 Business
Combinations? Does the investor recognise a non-controlling interest for equity not
attributable to the parent?
(ii) how frequently do these transactions occur?
6 In your experience:
(a) how widespread are collaborative arrangements that do not meet the IFRS 11 denition
of ‘joint arrangement’ because the parties to the arrangement do not have joint control?
Please provide a description of the features of these collaborative arrangements,
including whether they are structured through a separate legal vehicle.
(b) how do entities that apply IFRS Accounting Standards account for such collaborative
arrangements? Is the accounting a faithful representation of the arrangement and why?
7 In your experience:
(a) how frequently does a party to a joint arrangement need to consider other facts and
circumstances to determine the classication of the joint arrangement after having
considered the legal form and the contractual arrangement?
(b) to what extent does applying paragraphs B29–B32 of IFRS 11 enable an investor
to determine the classication of a joint arrangement based on ‘other facts and
circumstances’? Are there other factors that may be relevant to the classication that are
not included in paragraphs B29–B32 of IFRS 11?
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Table A1—Questions in the Request for Information
Number Questions in the Request for Information
8 In your experience:
(a) to what extent does applying the requirements in IFRS 11 enable a joint operator to report
its assets, liabilities, revenue and expenses in a relevant and faithful manner?
(b) are there situations in which a joint operator cannot so report? If so, please describe
these situations and explain why the report fails to constitute a relevant and faithful
representation of the joint operator’s assets, liabilities, revenue and expenses.
9 In your experience:
(a) to what extent do the IFRS 12 disclosure requirements assist an entity to meet the
objective of IFRS 12, especially the new requirements introduced by IFRS 12 (for
example the requirements for summarised information for each material joint venture or
associate)?
(b) do the IFRS 12 disclosure requirements help an entity determine the level of detail
necessary to satisfy the objective of IFRS 12 so that useful information is not obscured
by either the inclusion of a large amount of detail or the aggregation of items that have
different characteristics?
(c) what additional information that is not required by IFRS 12, if any, would be useful to
meet the objective of IFRS 12? If there is such information, why and how would it be
used? Please provide suggestions on how such information could be disclosed.
(d) does IFRS 12 require information to be provided that is not useful to meet the objective
of IFRS 12? If yes, please specify the information that you consider unnecessary, why
it is unnecessary and what requirements in IFRS 12 give rise to the provision of this
information.
10 Are there matters not addressed in this Request for Information, including those arising
from the interaction of IFRS 10 and IFRS 11 and other IFRS Accounting Standards, that you
consider to be relevant to this Post-implementation Review? If so, please explain the matter
and why you think it should be addressed in the Post-implementation Review.
Appendix A—Questions in the Request
forInformation continued...
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Public consultation through a Request for Information
In December 2020, the IASB published a Request for Information for public comment. The Request for
Information was open for comment until 10 May 2021. The IASB received 84 comment letters, which are
available on the IFRS Foundation’s website.
Respondents to the Request for Information represented various stakeholder groups:
Table B1—Respondents by stakeholder type
Type of respondent Number of
respondents
Percentage of
respondents (%)
Academics 2 3
Accounting rms 7 8
Preparers and industry organisations 28 33
Professional accountancy bodies 16 19
Regulators and government agencies 5 6
Standard-setters 22 26
Users of nancial statements 4 5
Total 84 100
Respondents to the Request for Information represented different geographical regions:
Table B2—Respondents by geographical region
Geographical region Number of
respondents
Percentage of
respondents (%)
Global 9 11
Africa 6 7
Asia 18 21
Europe 36 43
Latin America and the Caribbean 7 8
North America 3 4
Oceania 5 6
Total 84 100
Appendix B—How evidence was gathered
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Stakeholder engagement
In the second phase of the Post-implementation Review, IASB members and technical staff participated in
more than 35 stakeholder-engagement events, including discussion forums, conferences and meetings with
individuals. Some of the events were facilitated by standard-setters or professional accountancy bodies.
The IASB also consulted with users of nancial statements, with a focus on understanding users’ views on the
information disclosed in accordance with IFRS 12.
The events included various stakeholder groups:
Table B3—Participants by stakeholder type
Type of participant Number of
events
Percentage of
events (%)
Academics 2 5
Accounting rms 5 14
Preparers and industry organisations 3 8
Professional accountancy bodies 2 5
Regulators and government agencies 5 14
Standard-setters 11 30
Users of nancial statements 9 24
Total 37 100
The events included participants from various geographical regions:
Table B4—Participants by geographical region
Geographical region Number of
events
Percentage of
events (%)
Global 9 24
Africa 4 11
Asia 6 17
Europe 10 27
Latin America and the Caribbean 2 5
North America 4 11
Oceania 2 5
Total 37 100
Appendix B—How evidence was gathered
continued...
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Review of academic research
The IASB reviewed academic research using the databases Google Scholar, the Social Science Research
Network, LexisNexis and EBSCO Business Complete. The IASB searched these databases using a set of
keywords based on areas within the scope of the Post-implementation Review. The IASB examined both
published and unpublished manuscripts identied from the search.
The review of academic research was conducted in two phases and discussed at the IASB meetings in:
• April 2020, in the rst phase of the Post-implementation Review; and
• July 2021, in the second phase of the Post-implementation Review, when an updated review was presented.
The review of academic research identied 11 studies within the scope of the Post-implementation Review—of
which 10 were published in academic journals and one was unpublished.
The ndings from the academic research included:
• mixed evidence on whether implementing IFRS 10 resulted in an entity changing its assessment of whether
it controlled an investee;
• mixed evidence on whether IFRS 11 improved relevance and comparability in the accounting for joint
arrangements; and
• limited evidence on IFRS 12.
Additional research
The IASB supplemented the academic research by conducting a limited desk-based review of nancial
statements focusing on disclosures provided in accordance with IFRS 12. The objective of the review was
to provide evidence on whether the disclosure objective of IFRS 12 has resulted in improved information for
users of nancial statements.
The ndings from the research helped with developing materials for discussion during meetings with
stakeholders, especially in meetings with users.
Appendix B—How evidence was gathered
continued...
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Appendix C—Feedback summary and the
IASB’s responses
Matters the IASB assessed as low priority
Subsidiaries that are investment entities
Table C1—Question 4(b) of the Request for Information
Feedback Response
Question 4(b) of the Request for Information
asked whether useful information is lost when
an investment entity measures at fair value
its investment in a subsidiary that is itself an
investment entity.
Respondents generally supported the IASB’s view
that fair value information is the most relevant
information for investment entities. However,
some respondents said information is lost
when an investment entity parent measures an
investment entity subsidiary at fair value, including
informationon:
• investments held by the subsidiary, for example,
information on fair value and changes in the fair
value of these investments;
• other assets and liabilities held by the subsidiary,
such as cash balances and borrowings; and
• investment-related services provided by the
subsidiary, for example, revenue and the cost of
the services.
The IASB observed that some investment entity
parents voluntarily disclose this information.
The IASB observed that:
• information is lost only for investment entities
with multi-layered structures; and
• information loss can be compensated for by
voluntary disclosure.
If identied as a priority in the next agenda
consultation, the IASB could either:
• research and consider developing disclosure
requirements for subsidiaries that are investment
entities themselves; or
• reconsider which subsidiaries an investment
entity parent consolidates, and which
subsidiaries are measured at fair value.
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Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB assessed as low priority
Transactions that change the relationship between an investor and an investee
Table C2—Question 5(a) of the Request for Information
Feedback Response
Question 5(a) of the Request for Information asked
for feedback on the frequency of transactions
that alter the relationship between an investor
and an investee and are not addressed in
IFRSAccounting Standards, and how entities
account for the transactions. Respondents
discussed transactionsinvolving:
• a subsidiary becoming a joint operation;
• a joint venture becoming a joint operation;
• changes in a parent’s ownership interest in a
subsidiary that do not result in the parent losing
control of the subsidiary (the parent might
reclassify goodwill between equity interest
attributable to the parent and non-controlling
interest, which affects the subsequent
impairment assessment of the goodwill); and
• an entity becoming a party to a joint operation
without joint control.
The IASB considered:
• IFRS Accounting Standards do not provide
requirements for all transactions that alter
the relationship between an investor and an
investee; and
• respondents to the Request for Information
had mixed views on the frequency of those
transactions IFRS Accounting Standards do not
provide requirements for.
If identied as a priority in the next agenda
consultation, the IASB could either:
• provide requirements for transactions if they are
found to arise frequently; or
• explore the feasibility of identifying principles for
transactions that alter the relationship between
an investor and an investee.
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Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB assessed as low priority
Transactions that involve ‘corporate wrappers’
Table C3—Question 5(b) and question 10 of the Request for Information
Feedback Response
Question 5(b) of the Request for Information asked
how entities account for transactions in which an
investor acquires control of a subsidiary that does
not constitute a business.
Question 10 asked if there were other matters,
not specied in the Request for Information, that
respondents considered to be relevant to the
Post-implementation Review.
Respondents to these two questions asked if
the accounting outcome for transactions that are
structured through ‘corporate wrappers’ to achieve
particular purposes—for example, tax, legal
or regulatory purposes—should differ from the
accounting outcome for similar transactions that
are structured without ‘corporate wrappers’.
The IASB was concerned it might not be able to
successfully resolve this matter within the scope
of IFRS 10, particularly as the matter extends
beyond the scope of this Post-implementation
Review. For example, the matter might also affect
IFRS15 Revenue from Contracts with Customers
or IFRS16 Leases.
The structure of ‘corporate wrappers’ also depends
on jurisdictional laws and/or regulations. Therefore,
identifying matters to be addressed by the IASB
could require substantial resources for both the
IASB and its stakeholders.
If identied as a priority in the next agenda
consultation, the IASB could either:
• research whether it is appropriate and, if so,
whether it is possible to develop a principle for
transactions that involve ‘corporate wrappers’; or
• focus only on particular transactions that involve
‘corporate wrappers’.
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 20
Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB assessed as low priority
Collaborative arrangements outside the scope of IFRS 11
Table C4—Question 6 of the Request for Information
Feedback Response
Question 6 of the Request for Information asked
whether collaborative arrangements outside the
scope of IFRS 11 were widespread and how
entities apply IFRS Accounting Standards to such
collaborative arrangements.
Respondents said such collaborative arrangements
are commonplace in:
• the extractive industry;
• the real estate industry;
• the pharmaceutical industry;
• the entertainment industry; and
• the telecommunications industry.
Most respondents said entities determine
accounting policies by analogy to the requirements
for joint operations in IFRS 11. Some respondents
said some entities apply the equity method in
accordance with IAS 28 Investments in Associates
and Joint Ventures.
The IASB noted that collaborative arrangements
are only commonplace in some industries.
If identied as a priority in the next agenda
consultation, the IASB could research whether
there is a group of collaborative arrangements,
outside the scope of IFRS 11, with common
features (a homogeneous group).
If there is a homogeneous group of collaborative
arrangements, the IASB could assess whether
IFRS Accounting Standards provide guidance
for those arrangements and if standard-setting
isneeded.
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 21
Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB assessed as low priority
Additional disclosures about interests in other entities
Table C5—Question 9 of the Request for Information
Feedback Response
Question 9 of the Request for Information asked to
what extent the disclosure requirements in IFRS12
help an entity to meet the Standard’s disclosure
objective.
Respondents generally agreed that the IFRS 12
disclosure requirements enable an entity to meet
the Standard’s disclosure objective. However,
many users (particularly in meetings) requested
additional information on:
• management’s signicant judgements and
assumptions;
• subsidiaries with material non-controlling
interests;
• unconsolidated structured entities;
• information on joint ventures and associates by
operating segment, including line items, such as
the revenue of joint ventures; and
• joint operations.
The IASB acknowledged users’ requests for
additional disclosure on interests in other entities.
However, it also noted that, in developing additional
disclosure requirements, it would need to assess
the costs of implementing the new requirements
and the benets of the additional information.
Because the IASB concluded that entities can
meet the disclosure objective of IFRS 12, it
assessed the matter to be of low priority.
If identied as a priority in the next agenda
consultation, the IASB could assess whether there
is a need to improve the disclosure requirements
for interests in other entities.
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 22
Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB decided to take no further action on
Assessing control
Table C6—Questions 2 and 3 of the Request for Information
Feedback Response
Questions 2 and 3 of the Request for Information
asked for information on the requirements
for assessing whether an investor controls
anotherentity.
Most respondents agreed that applying the
requirements in IFRS 10 enables an investor
to assess whether it controls an investee—
inparticular, an investor can:
• identify the investee’s relevant activities;
• decide whether rights held by the investor or
other investors are substantive;
• decide whether rights held by the investor or
other investors are protective;
• decide whether the investor without a majority of
the voting rights controls the investee;
• decide whether a decision maker acts as a
principal or agent; and
• decide whether a non-contractual agency
relationship exists.
Some respondents provided fact patterns
illustrating challenges in assessing elements of the
denition of control. Some respondents asked for
further guidance to help assess control. However,
many respondents acknowledged that assessing
control requires judgement.
Because many respondents said an investor can
assess whether it controls an investee by applying
the requirements in IFRS 10, the IASB decided
against acting on matters relating to the denition
of control.
In developing IFRS 10, the IASB acknowledged
that assessing control requires judgement.
Theextent of the judgement required depends
on the complexity of the transaction and can,
sometimes, be signicant.
The IASB acknowledged the requests for further
guidance. However, the IASB also acknowledged
the need to balance the costs and benets of
developing and implementing new requirements.
On balance, the IASB decided that, if stakeholders
need further guidance, they are encouraged
to submit application questions meeting the
submission criteria to the IFRS Interpretations
Committee (Committee).
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 23
Appendix C—Feedback summary and the
IASB’s responses continued...
Matters the IASB decided to take no further action on
Denition of an investment entity
Table C7—Question 4(a) of the Request for Information
Feedback Response
Question 4(a) of the Request for Information asked
whether applying the denition of an investment
entity leads to consistent outcomes.
Most respondents said applying the denition in
paragraph 27 of IFRS 10 and the description of
the typical characteristics of an investment entity
in paragraph 28 of IFRS 10 leads to consistent
outcomes.
A few respondents (including those participating
in meetings with stakeholders) said there are
challenges in applying elements of the denition of
an investment entity. Consequently, inconsistent
application can arise.
The specic elements of the denition mentioned
by these respondents include:
• how to identify an entity’s exit strategy
(paragraph B85F of IFRS10); and
• how the business purpose of an entity
is compatible with the denition of an
investmententity.
The IASB decided to take no further action on this
matter.
The IASB acknowledged that judgement is
required when assessing whether an entity is
an investment entity. However, as supported by
most respondents, the IASB concluded that the
requirements in IFRS 10 adequately enable entities
to decide if an entity is an investment entity.
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 24
Matters the IASB decided to take no further action on
Classifying joint arrangements
Table C8—Question 7 of the Request for Information
Feedback Response
Question 7 of the Request for Information asked
whether a party to a joint arrangement can
determine the classication of a joint arrangement
based on other facts and circumstances.
Most respondents said applying paragraphs B29–
B32 of IFRS 11 enables an investor to determine
the classication of a joint arrangement based on
other facts and circumstances.
However, some respondents reported challenging
situations they encountered when classifying
joint arrangements based on other facts
and circumstances. For example, having to
determine whether a joint arrangement can be
classied as a joint operation when the life of the
arrangement is longer than the life of the assets of
thearrangement.
The IASB decided to take no further action on
thismatter.
The IASB agreed with most respondents that the
requirements of IFRS 11 enable an investor to
determine the classication of a joint arrangement
based on other facts and circumstances.
Appendix C—Feedback summary and the
IASB’s responses continued...
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 25
Matters the IASB decided to take no further action on
Accounting for joint operations
Table C9—Question 8 of the Request for Information
Feedback Response
Question 8 of the Request for Information asked
whether applying the requirements in IFRS 11
enables a joint operator to report its assets,
liabilities, revenue and expenses in a relevant and
faithful manner.
Many respondents said it is unclear how IFRS 11
requirements should be applied in a situation in
which a joint operator’s share of output purchased
differs from its ownership interest in the joint
operation. Respondents asked:
• for the basis on which a joint operator
determines its share of jointly held assets and
jointly incurred liabilities; and
• how an entity accounts for a difference
between the amount of assets and liabilities
initially recognised and the equity that was
initiallycontributed.
The IASB decided to take no further action, noting
that the Committee issued an Agenda Decision
on this matter in March 2015—IFRS 11 Joint
Arrangements—Accounting by the joint operator:
the accounting treatment when the joint operator’s
share of output purchased differs from its share of
ownership interest in the joint operation.
The Agenda Decision states that it is important to
understand why the share of the output purchased
differs from the ownership interests in the joint
operation and that judgement would, therefore, be
needed to determine the appropriate accounting.
Appendix C—Feedback summary and the
IASB’s responses continued...
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 26
Matters the IASB decided to take no further action on
Other matters
Table C10—Question 10 of the Request for Information
Feedback Response
Question 10 of the Request for Information asked
whether there are other matters respondents
consider to be relevant to the Post-implementation
Review.
Respondents raised other matters that, in their
view, could be relevant to the Post-implementation
Review, for example:
• elimination of proportionate consolidation;
• application questions on the equity method;
• put options on non-controlling interests;
• non-investment entity parents and their
investment entity subsidiaries;
• separate nancial statements of a joint
operation; and
• assessing control of a not-for-prot investee.
The IASB decided to take no further action on
these matters because:
• the matters lack many of the characteristics
required to qualify as priorities, in particular:
– the matters are not pervasive;
– the matters have no substantial
consequences; or
– the cost of developing and implementing new
requirements would outweigh the benet.
• some matters might be addressed by other
projects.
Appendix C—Feedback summary and the
IASB’s responses continued...
Post-implementation Review of IFRS 10, IFRS 11 and IFRS 12 | June 2022 | 27
Appendix D—Time line of the
Post-implementation Review
September 2019
–March 2020
May 2021
December 2020
October 2021–
February 2022
April 2020
July 2021
January–
April 2021
June 2022
FIRST PHASE
SECOND PHASE
Initial consultation with
stakeholders and a review of
academic research.
Request for Information
comment deadline—84 comment
letters received.
The IASB assessed evidence
gathered in the second phase and
decided outcomes.
Request for Information
published.
The IASB decided which matters
would be examined further in the
Request for Information.
Summary of feedback and other
evidence presented to the IASB.
The IASB published the Project
Report and Feedback Statement.
Extensive and focused consultation
with stakeholders, an update
on academic research and a
limited desk-based review of
nancialstatements.
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