To require an entity to disclose information that enables users of its financial statements to evaluate:
The nature of, and risks associated with, its interests in other entities (subsidiaries, joint arrangements, associates, and unconsolidated structured entities).
The effects of those interests on its financial position, financial performance, and cash flows.
IFRS 12 consolidates, enhances, and replaces the disclosure requirements previously found in IAS 27 (for subsidiaries), IAS 28 (for associates), and IAS 31/IFRS 11 (for joint arrangements).
IFRS 12 applies to entities that have an interest in any of the following:
Subsidiaries (as defined in IFRS 10).
Joint arrangements (joint operations or joint ventures, as defined in IFRS 11).
Associates (as defined in IAS 28).
Unconsolidated structured entities.
The standard applies whether the interests are held directly or indirectly through other entities.
Exclusions from IFRS 12 (though other IFRSs may require disclosures):
Post-employment benefit plans or other long-term employee benefit plans to which IAS 19 applies.
An entity's separate financial statements if the entity does not have any interests in other entities within scope (though IAS 27 disclosures would apply).
Interests accounted for in accordance with IFRS 9 Financial Instruments (e.g., simple investments not conferring control, joint control, or significant influence), although some IFRS 12 disclosures might be relevant if these interests are in structured entities.
Certain disclosures are not required for interests classified as held for sale under IFRS 5.
1. Interests in Subsidiaries
Disclose information that enables users to understand:
The composition of the group.
The interest that non-controlling interests (NCI) have in the groupā€™s activities and cash flows.
The nature and extent of significant restrictions on its ability to access or use assets, and settle liabilities, of the group.
The nature of, and changes in, the risks associated with its interests in consolidated structured entities.
The consequences of losing control of a subsidiary during the period.
For each subsidiary with material NCI to the reporting entity:
Name and principal place of business.
Proportion of ownership interests and voting rights held by NCI.
Profit or loss allocated to NCI during the reporting period.
Accumulated NCI at the end of the reporting period.
Summarized financial information about the subsidiary (e.g., assets, liabilities, revenue, profit/loss, dividends paid to NCI) before intercompany eliminations.
If control of a subsidiary is lost: Disclose the gain or loss, and the portion attributable to remeasuring any retained interest at fair value.
2. Interests in Joint Arrangements and Associates
Disclose information enabling users to evaluate the nature, extent, and financial effects of interests in JAs and associates, and the nature of risks associated.
For each material joint venture (JV) or associate:
Name, nature of relationship, principal place of business, proportion of ownership/voting rights.
Method of accounting (equity method).
Summarized financial information (e.g., current/non-current assets, current/non-current liabilities, revenue, profit/loss from continuing operations, post-tax P/L from discontinued operations, OCI, total comprehensive income, depreciation & amortization, interest income/expense, income tax expense).
Dividends received from the JV or associate.
Fair value if there is a published price quotation.
For immaterial JVs and associates (collectively):
Carrying amount of investments in JVs and carrying amount of investments in associates.
Share of profit/loss and share of OCI.
Nature and extent of significant restrictions on the ability of JVs/associates to transfer funds.
Unrecognized share of losses of an associate or JV, both for the period and cumulatively.
Commitments relating to JVs and contingent liabilities incurred relating to interests in JVs/associates.
3. Interests in Unconsolidated Structured Entities
Disclose information enabling users to understand the nature and extent of interests, and the nature of associated risks.
Qualitative and quantitative information about interests, including nature, purpose, size, activities, and how financed.
Nature of involvement (e.g., sponsorship, liquidity support, credit enhancement).
Terms of any contractual obligation to provide financial or other support, or intention to provide support.
Current exposure to risk (e.g., carrying amounts of assets/liabilities recognized, line items, maximum exposure to loss).
Any support provided during the reporting period without contractual obligation (implicit support), reasons, and type/amount of support.
If the entity has sponsored unconsolidated structured entities but does not have an interest at reporting date: Disclose how it determined which to sponsor, income received, carrying amount of assets transferred.
4. Significant Judgments and Assumptions (Consolidation)
Disclose significant judgments and assumptions made (and changes to them) in determining:
That it controls another entity (especially where control is not straightforward, e.g., less than 50% voting rights, or assessing de facto control, or control over structured entities).
That it has joint control of an arrangement or significant influence over another entity.
The type of joint arrangement (joint operation or joint venture) when structured through a separate vehicle.
Determining whether an entity has control (IFRS 10), joint control (IFRS 11), or significant influence (IAS 28) over another entity, which dictates the type of disclosures.
Assessing whether a joint arrangement is a joint venture or a joint operation based on rights and obligations.
Identifying structured entities and evaluating the nature and extent of the reporting entity's interests in them.
Estimating the maximum exposure to loss from interests in unconsolidated structured entities.
Assessing the materiality of non-controlling interests and the need for disaggregated summarized financial information for specific subsidiaries.
Determining the level of detail required for disclosures to meet the overall objective of IFRS 12.
