Posted by & filed under Financial Reporting.

12 February 2013

 

Mr Hans Hoogervorst
Chairman
International Accounting Standards Board
30 Cannon Street
London EC 4M 6XH
UNITED KINGDOM

Dear Mr Hoogervorst

ED/2012/7 Acquisition of an interest in a joint operation

The Group of 100 (G100) is an organization of chief financial officers from Australia’s largest business enterprises with the purpose of advancing Australia’s financial competitiveness.

Q1 The IASB proposes to amend IFRS 11 and IFRS 1 so that a joint operator accounting for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a business applies the relevant principles on business combinations accounting in IFRS 3 and other Standards, and discloses the relevant information required by those Standards for business combinations. Do you agree with the proposed amendment? Why or why not? If not, what alternative do you propose?

The G100 agrees with the proposed amendments to IFRS 11 ‘Joint Arrangements’ and consequential amendments to IFRS 1 ‘First-time adoption of IFRSs’ where the joint operation in which an interest is acquired is a business as defined in IFRS 3 ‘Business Combinations’.

Q2 The IASB intends to apply the proposed amendment to IFRS 11 and the proposed consequential amendment to IFRS 1 to the acquisition of an interest in a joint operation on its formation. However, it should not apply if no existing business is contributed to the joint operation on its formation. Do you agree with the proposed amendment? Why or why not? If not, what alternative do you propose?

The G100 agrees that the proposed amendments should not apply if an existing business is not contributed to the joint operation when it is formed.

Q3 The IASB intends to apply the proposed amendment to IFRS 11 and the proposed consequential amendment to IFRS 1 prospectively to acquisitions of interests in joint operations in which the activity of the joint operation constitutes a business on or after the effective date. Do you agree with the proposed transition requirement? Why or why not? If not, what alternative do you propose?

The G100 agrees that on grounds of practicality the proposed amendments should apply prospectively.

 

Yours sincerely
Group of 100 Inc

 

Terry Bowen
President


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