IASB consolidation project continues to evolve

Started in 2003, the IASB¡¦s consolidation project continues to progress. The goal of the project is to publish a single IFRS that will establish the control criteria to be applied to all entities, so replacing IAS 27 "Consolidated and Separate Financial Statements" and SIC 12 "Consolidation ¡V Special Purpose Entities"

The consolidation of structured entities such as special purpose entities has been a topical issue in recent months due to the effects of the current credit crunch, and may have been a factor in the IASB¡¦s decision to discuss a proposed approach to consolidation of such entities in its November 2007 meeting. The approach proposed in that meeting would focus on a "single control model" as opposed to a "risks and rewards" one, although control would often be assessed through an analysis of risks and rewards.

With the Board expecting to issue a discussion paper in the second half of 2008, this project is certainly one to watch.