This free, guided checker walks your finance team through the key decision points for IAS 28 Associate and Significant Influence. Answer a few questions to see the likely treatment and the evidence to document.
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This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
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Board representation, policy participation, material transactions, management interchange, and essential technical information can evidence significant influence.
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Official guidance: IFRS issued standards
IAS 28.7 permits potential voting rights in the significant-influence assessment only when they are currently exercisable or convertible, not merely contingent on future events.
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Official guidance: IFRS issued standards
A 20 percent holding creates a rebuttable presumption, not an automatic conclusion, and may be rebutted when another investor holds majority voting power.
Account for the holding under IFRS 9 classification and measurement unless another relationship gives control or joint control (IAS 28.5; IFRS 9.4.1.4).
Official guidance: IFRS issued standards
Consultation memos treat fully prepaid subscriptions as a fair-value financial asset until conditions are met and voting rights are conferred, because the counterparty could block issuance or refund cash.
Measure the prepaid subscription at fair value under IFRS 9 until the equity-method commencement date (IAS 28.14A; IAS 28.32).
Official guidance: IFRS issued standards
IAS 28.14 limits the associate carrying amount to existing ownership interests; preference shares that fail SPPI or lack ownership returns stay under IFRS 9 separately from equity-method ordinary shares.
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Official guidance: IFRS issued standards
Venture capital organizations, mutual funds, unit trusts, and similar entities including investment-linked insurance funds may elect FVTPL for qualifying interests, investment by investment, at initial recognition; the elected interests are then measured under IFRS 9 rather than the equity method (IAS 28.18-28.19).
Document the election at initial recognition and measure the qualifying interest at fair value through profit or loss under IFRS 9 (IAS 28.18-28.19).
Official guidance: IFRS issued standards
Equity accounting starts when significant influence begins; initial cost equals fair value of consideration or derecognised prepayment at that date with a purchase-price allocation for basis differences.
Apply the equity method from the date the investment becomes an associate (IAS 28.16; IAS 28.32). Document the commencement date and acquisition-date fair values before recording equity-method balances (IAS 28.32).
Official guidance: IFRS issued standards
Distinguish participation in policy decisions from shared control requiring unanimous consent over budgets, business plans, and other super-majority board matters.
Complete an IFRS 11 joint-control assessment and classify the arrangement as a joint operation or joint venture before any equity-method recording (IFRS 11.7; IFRS 11.14). Apply IFRS 9 because neither significant influence nor joint control is identified (IAS 28.5; IFRS 11.7).
Official guidance: IFRS issued standards
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