Users of financial statements have consistently requested improvements to the disclosure of a reporting entity's interests in other entities to help identify the profit or loss and cash flows available to the reporting entity and determine the value of a current or future investment in the reporting entity.

They highlighted the need for better information about the subsidiaries that are consolidated, as well as an entity's interests in joint arrangements and associates that are not consolidated but with which the entity has a special relationship.

The global financial crisis that started in 2007 also highlighted a lack of transparency about the risks to which a reporting entity was exposed from its involvement with structured entities, including those that it had sponsored.

In response to input received from users and others, including the G20 leaders and the Financial Stability Board, the Board decided to address in IFRS 12 the need for improved disclosure of a reporting entity's interests in other entities when the reporting entity has a special relationship with those other entities.

The Board identified an opportunity to integrate and make consistent the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities and present those requirements in a single IFRS. The Board observed that the disclosure requirements of IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures overlapped in many areas. In addition, many commented that the disclosure requirements for interests in unconsolidated structured entities should not be located in a consolidation standard. Therefore, the Board concluded that a combined disclosure standard for interests in other entities would make it easier to understand and apply the disclosure requirements for

subsidiaries, joint ventures, associates and unconsolidated structured entities.

The objective of this IFRS is to require an entity to disclose information that enables users of its financial statements to evaluate:

(a)   the nature of, and risks associated with, its interests in other

entities; and

(b)    the effects of those interests on its financial position, financial performance and cash flows.  Meeting the objective

2     To meet the objective in paragraph 1, an entity shall disclose:

(a)       the significant judgements and assumptions it has made in determining:

the nature of its interest in another entity or arrangement;

the type of joint arrangement in which it has an interest

(paragraphs 7-9);

that it meets the definition of an investment entity, if applicable (paragraph 9A); and

(b)       information about its interests in:

(i)        subsidiaries (paragraphs 10-19);

(ii)       joint arrangements and associates (paragraphs 20-23); and

(iii)       structured entities that are not controlled by the entity

(unconsolidated structured entities) (paragraphs 24-31).

This IFRS shall be applied by an entity that has an interest in any of the following:

(c)  associates

(d)  unconsolidated structured entities.

6 This IFRS does not apply to:

post-employment benefit plans or other long-term employee benefit

plans to which IAS 19 Employee Benefits applies.

an entity's separate financial statements to which IAS 27 Separate

Financial Statements applies. However, if an entity has interests in unconsolidated structured entities and prepares separate financial statements as its only financial statements, it shall apply the requirements in paragraphs 24-31 when preparing those separate financial statements.

an interest held by an entity that participates in, but does not have joint control of, a joint arrangement unless that interest results in significant influence over the arrangement or is an interest in a structured entity.

an interest in another entity that is accounted for in accordance with

IFRS 9 Financial Instruments. However, an entity shall apply this IFRS:

when that interest is an interest in an associate or a joint venture that, in accordance with IAS 28 Investments in Associates and Joint Ventures, is measured at fair value through profit or loss; or when that interest is an interest in an unconsolidated structured entity.

Significant judgements and assumptions

  An entity shall disclose information about significant judgements and  assumptions it has made (and changes to those judgements and assumptions) in determining:

that it has control of another entity, ie an investee as described in paragraphs 5 and 6 of IFRS 10 Consolidated Financial Statements;

  that it has joint control of an arrangement or significant influence over another entity; and  the type of joint arrangement (ie joint operation or joint venture)  when the arrangement has been structured through a separate vehicle.

it is an agent or a principal (see paragraphs B58-B72 of IFRS 10).

it does not have significant influence even though it holds 20 per cent or more of the voting rights of another entity.

it has significant influence even though it holds less than 20 per cent of the voting rights of another entity.

Investment entity status When a parent determines that it is an investment entity in accordance

with paragraph 27 of IFRS 10, the investment entity shall disclose information about significant judgements and assumptions it has made in determining that it is an investment entity. If the investment entity does not have one or more of the typical characteristics of an investment entity (see paragraph 28 of IFRS 10), it shall disclose its reasons for concluding that it is nevertheless an investment entity.

When an entity becomes, or ceases to be, an investment entity, it shall disclose the change of investment entity status and the reasons for the change. In addition, an entity that becomes an investment entity shall disclose the effect of the change of status on the financial statements for the period presented,

including:

the total fair value, as of the date of change of status, of the subsidiaries

that cease to be consolidated;

the total gain or loss, if any, calculated in accordance with paragraph B101 of IFRS 10; and the line item(s) in profit or loss in which the gain or loss is recognised (if not presented separately).

Interests in subsidiaries   An entity shall disclose information that enables users of its consolidated financial statements

 to understand:

(i)        the composition of the group; and

(ii)       the interest that non-controlling interests have in the group's activities and cash flows (paragraph 12); and

 to evaluate:

  When the financial statements of a subsidiary used in the preparation of

consolidated financial statements are as of a date or for a period that is different from that of the consolidated financial statements (see paragraphs B92 and B93 of IFRS 10), an entity shall disclose:

(a)        the date of the end of the reporting period of the financial statements of

that subsidiary; and

(b)        the reason for using a different date or period.

The interest that non-controlling interests have in the

group's activities and cash flows

  An entity shall disclose for each of its subsidiaries that have non-controlling

interests that are material to the reporting entity:

the name of the subsidiary.

the principal place of business (and country of incorporation if different from the principal place of business) of the subsidiary.

the proportion of ownership interests held by non-controlling interests.

the proportion of voting rights held by non-controlling interests, if

different from the proportion of ownership interests held.

the profit or loss allocated to non-controlling interests of the subsidiary during the reporting period.

accumulated non-controlling interests of the subsidiary at the end of the reporting period.

(g)        summarised financial          information     about     the    subsidiary     (see paragraph B10).

The nature and extent of significant restrictions

 An entity shall disclose:

significant restrictions (eg statutory, contractual and regulatory

restrictions) on its ability to access or use the assets and settle the

liabilities of the group, such as:

those that restrict the ability of a parent or its subsidiaries to transfer cash or other assets to (or from) other entities within the group. guarantees or other requirements that may restrict dividends and other capital distributions being paid, or loans and advances being made or repaid, to (or from) other entities within the group. the nature and extent to which protective rights of non-controlling