The objective of IAS 28, as amended in 2011 (and hereafter referred to simply as IAS 28), is to prescribe the accounting for investments in associates and to set out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (that is, an associate or joint venture).
Like its predecessor, IAS 28 is largely a mechanical standard. The standard has not changed the definition or even the notion of significant influence. It continues to “define” an associate and it still requires the use of the equity method of accounting for such investments. Where it has changed is that the use of the equity method is now extended to joint arrangements. The proportionate consolidation method permitted by IAS 31 is eliminated. Furthermore, because by definition, no one party can control a joint venture, investments in joint ventures will always be shown as investments and not consolidated.
IFRS 28 Investments in Associates and Joint Ventures — 2011
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Further resources on IFRS/IAS
Other IFRS/IAS articles and Professional Development Courses on PD Net