joint venture, at the later of the date on which:
(a) the investment entity associate or joint venture is initially recognised;
(b) the associate or joint venture becomes an investment entity; and
(c) the investment entity associate or joint venture first becomes a parent. [IAS 28.36A].
7.8.2 Temporary exemption from IFRS 9 applied by an insurer
For an insurer that meets specified criteria, IFRS 4 – Insurance Contracts – provides a
temporary exemption that permits, but does not require, the insurer to apply IAS 39
rather than IFRS 9 until IFRS 17 becomes effective. An entity is permitted, but not
required, to retain the relevant accounting policies applied by the associate or joint
venture as follows:
(a) the entity applies IFRS 9 but the associate or joint venture applies the temporary
exemption from IFRS 9; or
(b) the entity applies the temporary exemption from IFRS 9 but the associate or joint
venture applies IFRS 9. [IFRS 4.20O].
When an entity uses the equity method to account for its investment in an associate or
joint venture:
(a) if IFRS 9 was previously applied in the financial statements used to apply the equity
method to that associate or joint venture (after reflecting any adjustments made by
the entity), then IFRS 9 shall continue to be applied; or
(b) if the temporary exemption from IFRS 9 was previously applied in the financial
statements used to apply the equity method to that associate or joint venture (after
reflecting any adjustments made by the entity), then IFRS 9 may be subsequently
applied. [IFRS 4.20P].
An entity may apply the above exemptions separately for each associate or joint
venture. [IFRS 4.20Q].
7.9 Loss-making associates or joint ventures
An investor in an associate or joint venture should recognise its share of the losses of the
associate or joint venture until itsjoint venture, at the later of the date on which:
(a) the investment entity associate or joint venture is initially recognised;
(b) the associate or joint venture becomes an investment entity; and
(c) the investment entity associate or joint venture first becomes a parent. [IAS 28.36A].
7.8.2 Temporary exemption from IFRS 9 applied by an insurer
For an insurer that meets specified criteria, IFRS 4 – Insurance Contracts – provides a
temporary exemption that permits, but does not require, the insurer to apply IAS 39
rather than IFRS 9 until IFRS 17 becomes effective. An entity is permitted, but not
required, to retain the relevant accounting policies applied by the associate or joint
venture as follows:
(a) the entity applies IFRS 9 but the associate or joint venture applies the temporary
exemption from IFRS 9; or
(b) the entity applies the temporary exemption from IFRS 9 but the associate or joint
venture applies IFRS 9. [IFRS 4.20O].
When an entity uses the equity method to account for its investment in an associate or
joint venture:
(a) if IFRS 9 was previously applied in the financial statements used to apply the equity
method to that associate or joint venture (after reflecting any adjustments made by
the entity), then IFRS 9 shall continue to be applied; or
(b) if the temporary exemption from IFRS 9 was previously applied in the financial
statements used to apply the equity method to that associate or joint venture (after
reflecting any adjustments made by the entity), then IFRS 9 may be subsequently
applied. [IFRS 4.20P].
An entity may apply the above exemptions separately for each associate or joint
venture. [IFRS 4.20Q].
7.9 Loss-making associates or joint ventures
An investor in an associate or joint venture should recognise its share of the losses of the
associate or joint venture until its share of losses equals or exceeds its interest in the
associate or joint venture, at which point the investor discontinues recognising its share of
further losses. For this purpose, the investor’s interest in an associate or joint venture is the
carrying amount of the investment in the associate or joint venture under the equity
method together with any long-term interests that, in substance, form part of the investor’s
net investment in the associate or joint venture. For example, an item for which settlement
is neither planned nor likely to occur in the foreseeable future is, in substance, an extension
of the entity’s investment in that associate or joint venture. [IAS 28.38]. The items that form
share of losses equals or exceeds its interest in the
associate or joint venture, at which point the investor discontinues recognising its share of
further losses. For this purpose, the investor’s interest in an associate or joint venture is the
carrying amount of the investment in the associate or joint venture under the equity
method together with any long-term interests that, in substance, form part of the investor’s
net investment in the associate or joint venture. For example, an item for which settlement
is neither planned nor likely to occur in the foreseeable future is, in substance, an extension
of the entity’s investment in that associate or joint venture. [IAS 28.38]. The items that form
