The IASB has published final amendments to IAS 28, clarifying the scope of the fair value option for investments in associates and joint ventures.

Paragraphs 18 and 19 of the standard are affected. The background to this is inconsistent application in practice: various stakeholders had pointed to differing interpretations as to which entities are actually permitted to elect the fair value option.

It has now been clarified that this is reserved for entities whose main business activity consists of certain types of assets – with reference to the requirements of paragraph 49(a) of IFRS 18.

The amendments apply to financial years beginning on or after 1 January 2027, in line with IFRS 18.

Link: IASB issues amendments clarifying the fair value option in IAS 28 – IFRS Foundation