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The International Accounting Standards Board
(IASB) is planning to exempt investment entities from consolidation
requirements of IFRS 10, according to an exposure draft.

In the proposal published by the standard
setter, investment entities are defined as a separate type of
entity that would be exempt from the accounting requirements in
IFRS 10 Consolidated Financial Statements.

Currently IFRS 10 Consolidated Financial
Statements requires consolidation if an investment entity controls
an entity it is investing in. 

The IASB proposal is broadly aligned with the
US Financial Accounting Standards Board’s approach, which is
considering to extend the exemption to cases in which the
investment entity is owned by a larger group that is not itself an
investment entity. 

The FASB is planning to publish its
own exposure draft for investment funds in due course.

The IASB exposure draft Investment Entities is
open for comment until 5 January 2012.

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