ASBJ publishes Short Paper Series No.3 “Perspectives on the Equity Method of Accounting”

3 September 2021

The ASBJ published Short Paper Series No. 3 “Perspectives on the Equity Method of Accounting”, with a view contribute to the global debate surrounding the equity method of accounting.  The ASBJ has submitted the paper for discussions at the International Forum of Accounting Standard Setter meeting to be held in September 2021 and at the Accounting Standards Advisory Forum to be held in October 2021.

This paper proposes principles that would clarify when to focus on the aspect of one-line consolidation and when to focus on the aspect of a measurement basis to address the current practical issues arising from applying the equity method of accounting, with the understanding that the existing requirements in IAS 28 Investments in Associates and Joint Ventures have both aspects of one-line consolidation and a measurement basis.

The IASB is currently undertaking the Equity Method research project.  The ASBJ hopes that the analyses and proposals in this paper contributes to the IASB’s work to improve the equity method of accounting.

Attachment: ASBJ’s Short Paper Series No. 3 “Perspectives on the Equity Method of Accounting”