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IASB: Amendments clarifying the fair value option in IAS 28
- 14 July 2026
- Accounting
- South African Accounting Academy
Summary:
The International Accounting Standards Board (IASB) has issued targeted amendments to clarify which investments in associates and joint ventures a company is eligible to measure using the fair value option in IAS 28 Investments in Associates and Joint Ventures.
Article:
These amendments address exemptions from applying the equity method.
The Exposure Draft which led to these final amendments proposed amending paragraphs 18–19 of IAS 28 to clarify that an entity that has a main business activity of investing in particular types of assets (as set out in paragraph 49(a) of IFRS 18) is eligible to elect the fair value option in IAS 28. Refer to our previous alert dated 13 April 2026
Why these amendments were necessary
As companies prepare to implement IFRS 18 Presentation and Disclosure in Financial Statements, stakeholders have reported diverse interpretations of how its new requirements interact with the fair value option in IAS 28. This issue has direct consequences for how income and expenses are classified in the statement of profit or loss.
The IASB has acted swiftly to bring consistency ahead of the effective date of IFRS 18.
The amendments are deliberately narrow in scope to address only the specific concerns identified by stakeholders, without disrupting existing practice or creating unintended consequences elsewhere in IFRS Accounting Standards.
The amendments take effect when a company first applies IFRS 18.
Click here to download the 11-page document:
Relevance to Auditors, Independent Reviewers & Accountants:
- As an auditor and independent reviewer, you need to consider your clients’ compliance with accounting standards.
- Auditors, Independent Reviewers and Accountants should be aware of the latest publications and guidance issued by regulators and standard-setting boards, such as the IASB.
- As an accountant and compiler of financial statements, you need to consider amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.
Relevance to Your clients:
- An entity compiling filing financials need to consider amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.