The International Accounting Standards Board has issued targeted amendments to IAS 28 to clarify when investments in associates and joint ventures may be accounted for using the fair value option.
The amendments are linked to the forthcoming application of IFRS 18 and are intended to remove uncertainty about presentation of related income and expenses in the statement of profit or loss.
Key development
The amendments address a narrow interpretative issue concerning the interaction between IAS 28, Investments in Associates and Joint Ventures, and IFRS 18, Presentation and Disclosure in Financial Statements. In particular, they clarify the scope of investments eligible for fair value measurement under IAS 28 where entities apply the fair value option.
The changes are not intended to alter current accounting practices broadly. Instead, they are designed to provide clarity as entities prepare for IFRS 18 implementation and assess how investment income and expenses should be presented.
Financial reporting and audit impacts
The amendments may be relevant to entities that hold investments in associates or joint ventures and currently apply, or are considering applying, the fair value option under IAS 28.
Key financial reporting implications include:
- Classification and measurement assessment
Entities will need to reassess whether specific investments in associates or joint ventures qualify for fair value measurement under IAS 28. - Profit or loss presentation
As IFRS 18 introduces a more structured approach to presenting income and expenses, entities should consider how fair value gains or losses from eligible investments are presented in the statement of profit or loss. - Consistency of accounting policies
Groups with multiple associates or joint ventures should ensure that their accounting policy elections are applied consistently and supported by appropriate documentation. - Disclosure considerations
Although the amendments are narrow, entities may need to update disclosures explaining measurement bases, significant accounting policies, and key judgements where fair value measurement is used. - Audit focus areas
Auditors may place greater emphasis on management’s assessment of eligibility for the fair value option, the appropriateness of presentation under IFRS 18, and whether related disclosures are sufficiently clear.
Practical issues
Entities preparing for IFRS 18 implementation should consider the following practical matters:
- Identifying affected investments
Management should review all investments in associates and joint ventures to identify those measured, or intended to be measured, at fair value. - Documenting management judgement
Where fair value measurement is applied, entities should retain clear documentation supporting why the investment falls within the permitted scope of IAS 28. - Updating accounting manuals and reporting templates
Finance teams may need to amend accounting policy documents, consolidation instructions, and financial statement mapping to reflect the clarified requirements. - System and chart of account changes
Entities may need to revisit how fair value movements, dividend income, and related expenses are captured and presented for IFRS 18 reporting purposes. - Transition planning
The amendments become applicable when an entity first applies IFRS 18. Entities should therefore incorporate the IAS 28 clarification into their broader IFRS 18 implementation project.
Action points
Entities should not view the amendments as a major change to IAS 28, but they should treat them as an important implementation matter for IFRS 18 readiness.
Recommended next steps include:
- Review investments in associates and joint ventures for potential exposure to the amendments.
- Confirm whether the fair value option has been applied appropriately.
- Assess whether profit or loss presentation will change under IFRS 18.
- Update accounting policies, reporting templates, and audit documentation where required.
- Discuss any judgemental areas early with auditors or professional advisers.
The amendments are limited in scope, but they provide useful clarification at a time when many entities are preparing for significant presentation and disclosure changes under IFRS 18.
Source: IFRS, 26 June 2026.