Exceptions to Proportionate Consolidatio

Exceptions to Proportionate Consolidation and Equity Method

42 Interests in jointly controlled entities that are classified as held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations shall be accounted for in accordance with that Standard.

43 When an interest in a jointly controlled entity previously classified as held for sale no longer meets the criteria to be so classified, it shall be accounted for using proportionate consolidation or the equity method as from the date of its classification as held for sale. Financial statements for the periods since classification as held for sale shall be amended accordingly.

44 [Deleted by the IASB]

45 When an investor ceases to have joint control over an entity, it shall account for any remaining investment in accordance with AASB 9 from that date, provided that the former jointly controlled entity does not become a subsidiary or an associate. From the date when a jointly controlled entity becomes a subsidiary of an investor, the investor shall account for its interest in accordance with AASB 127 and AASB 3 Business Combinations (as revised in March 2008). From the date when a jointly controlled entity becomes an associate of an investor, the investor shall account for its interest in accordance with AASB 128. On the loss of joint control, the investor shall measure at fair value any investment the investor retains in the former jointly controlled entity. The investor shall recognise in profit or loss any difference between:

(a) the fair value of any retained investment and any proceeds from disposing of the part interest in the jointly controlled entity; and

(b) the carrying amount of the investment at the date when joint control is lost.

45A When an investment ceases to be a jointly controlled entity and is accounted for in accordance with AASB 9, the fair value of the investment when it ceases to be a jointly controlled entity shall be regarded as its fair value on initial recognition as a financial asset in accordance with AASB 9.

45B If an investor loses joint control of an entity, the investor shall account for all amounts recognised in other comprehensive income in relation to that entity on the same basis as would be required if the jointly controlled entity had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income would be reclassified to profit or loss on the disposal of the related assets or liabilities, the investor reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the investor loses joint control of the entity. For example, if a jointly controlled entity has cumulative exchange differences relating to a foreign operation and the investor loses joint control of the entity, the investor shall reclassify to profit or loss the gain or loss previously recognised in other comprehensive income in relation to the foreign operation. If an investor’s ownership interest in a jointly controlled entity is reduced, but the investment continues to be a jointly controlled entity, the investor shall reclassify to profit or loss only a proportionate amount of the gain or loss previously recognised in other comprehensive income.