4 IAS 28 Amendments to the Fair Value Option

16 July 2026
Agenda Paper 4
OFFICIAL - PUBLIC

Executive Summary

Project Type
Endorsement Project

Project Scope
Limited

Purpose of the paper

The purpose of this paper is to:

• Obtain Board feedback on the [Draft] Endorsement Criteria Assessment ([Draft] ECA), and related Invitation to Comment (ITC) for Amendments to the Fair Value Option for Investments in Associates and Joint Ventures—Amendments to IAS 28 (the Amendments).
• Request the Board’s approval to publish the [Draft] ECA and ITC on the UKEB website for stakeholder consultation for an 80-day comment period¹.

Summary of the Issue

The purpose of the [Draft] ECA is to assess whether the Amendments meet the statutory criteria for adoption set out in SI 2019/685² and to discharge the UKEB’s statutory duty to consult those with an interest in the quality and availability of accounts, including users and preparers. The [Draft] ECA includes:

• a description of the UK statutory requirements for adoption of new and amended international accounting standards;
• a description of the Amendments; and
• an assessment of whether the Amendments meet the statutory criteria for adoption.

An entity shall apply the Amendments for annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted.

Decisions for the Board

1. Does the Board have any comments on the [Draft] ECA (Appendix A) or the ITC (Appendix B)?
2. Does the Board agree that, subject to any amendments or additions required by the Board, the [Draft] ECA and ITC can be published for public consultation?

Recommendation

Subject to any amendments required by the Board, the Secretariat recommends that the Board approves the [Draft] ECA and ITC for public consultation³.

Appendices

• Appendix A: [Draft] Endorsement Criteria Assessment of Amendments to the Fair Value Option for Investments in Associates and Joint Ventures—Amendments to IAS 28
• Appendix B: [Draft] ECA – Invitation to comment

---

Appendix A: [Draft] Endorsement Criteria Assessment

Amendments to the Fair Value Option for Investments in Associates and Joint Ventures—Amendments to IAS 28

August 2026

The UKEB does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it.

© 2026 All Rights Reserved

Introduction

Purpose

1The purpose of this [Draft] Endorsement Criteria Assessment ([Draft] ECA) is to determine whether Amendments to the Fair Value Option for Investments in Associates and Joint Ventures (Amendments to IAS 28 Investments in Associates and Joint Ventures) (Amendments) issued by the International Accounting Standards Board (IASB) in June 2026 meet the UK’s statutory requirements for adoption as set out in Regulation 7 of Statutory Instrument 2019/685² (SI 2019/685).

2The Amendments shall be applied at the same time an entity applies IFRS 18 Presentation and Disclosure in Financial Statements, which has an effective date of 1 January 2027. If an entity has elected to apply IFRS 18 prior to its effective date and that earlier period begins before the issuance of the Amendments, the entity shall apply the Amendments from the beginning of the reporting period starting on or after the issuance of the Amendments.

3The UKEB influenced the development of the Amendments and submitted a Final Comment Letter on 23 April 2026⁴, in response to the IASB’s Exposure Draft ED/2026/1 Amendments to the Fair Value Option for Investments in Associates and Joint Ventures⁵ (ED).

Background to the Amendments

4Table 1 in this [Draft] ECA provides a brief description of the Amendments.

Scope of the Adoption Assessment

5The Amendments make changes to the mandatory parts of IAS 28. These changes to the mandatory parts of the standard form part of the UKEB’s adoption assessment.

6As UK-adopted international accounting standards comprise only the mandatory⁶ sections of standard⁷, the amendments to the Basis for Conclusions of IAS 28 are not adopted by the Board and are not considered in this [Draft] ECA.

Structure of the Assessment

7Tables 2-4 discusses how the Amendments meet the UK statutory requirements for adoption of new or amended international accounting standards described in Appendix B.

[Draft] Adoption Decision

8[On the basis of these assessments, the UKEB [tentatively] concludes that the Amendments meet the statutory endorsement criteria. The UKEB is therefore [tentatively] of the view that it will adopt the Amendments for use in the UK.]

---

Description and Assessment of the Amendments

Description

---

Do the Amendments lead to a significant change in accounting practice?

9The UKEB is required to assess whether or not the Amendments are likely to lead to a ‘significant change in accounting practice’ and therefore meet the criteria for a post-implementation review.

10The Amendments do not fundamentally change the requirements in IAS 28, or introduce new principles. The Amendments merely clarify that an entity that has a main business activity of investing in particular types of assets (as set out in paragraph 49(a) of IFRS 18) is eligible to elect the fair value option in IAS 28. In addition, the Amendments are expected to be primarily of relevance to insurance entities in the UK.

11As a result, the UKEB [tentatively] concludes that the Amendments are not likely to lead to a significant change in accounting practice and do not meet the criteria requiring a mandatory post-implementation review under Regulation 11 in SI 2019/685.

---

Appendix A: Glossary

---

Appendix B: UK statutory requirements for adoption

Introduction

B1This appendix sets out the UK statutory requirements for the adoption of new or amended international accounting standards, and the endorsement criteria assessment approach.

B2Paragraph 1 of Regulation 7 of SI 2019/685 requires that an international accounting standard only be adopted if:

1. the standard¹⁰ is not contrary to either of the following principles—
   
   1. an undertaking’s accounts must give a true and fair view of the undertaking’s assets, liabilities, financial position and profit or loss;
   2. consolidated accounts must give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the accounts taken as a whole, so far as concerns members of the undertaking;
2. the use of the standard is likely to be conducive to the long term public good in the United Kingdom; and
3. the standard meets the criteria of understandability, relevance, reliability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management.

Approach to the endorsement criteria

B3This [Draft] ECA assesses the criteria above, in the following order:

1. Whether the Amendments meets the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management (Regulation 7(1)(c)). We refer to these criteria collectively as the ‘technical accounting criteria’ (refer to Table 2).
2. Whether the Amendments are not contrary to the principle that an entity’s accounts must give a true and fair view (Regulation 7(1)(a)) (refer to Table 3).
3. Whether use of the Amendments is likely to be conducive to the long term public good in the UK (Regulation 7(1)(b)). Regulation 7(2) of SI 2019/685 includes specific areas to consider for this assessment (refer to Table 4). They are:
   
   1. whether the Amendments are likely to improve the quality of financial reporting;
   2. the costs and benefits that are likely to result from the use of the Amendments; and
   3. whether the Amendments are likely to have an adverse effect on the economy of the UK, including on economic growth.

Technical accounting criteria: Relevance, Reliability, Understandability and Comparability

B4A description of the technical accounting criteria¹² is provided below:

B5In conducting the overall assessment against the technical accounting criteria, the UKEB adopts an absolute, rather than a relative, approach. This is an absolute assessment against the criteria (do the Amendments provide information that is understandable, relevant, reliable and comparable?) rather than a relative one (do the Amendments provide information that is more or less understandable, relevant, reliable and comparable than current, or any other, accounting?). When an assessment of any individual aspect or requirement of the Amendments uses comparative language (e.g. ‘enhances comparability’), this does not mean that the objective is to reflect a real comparison in relative terms. Instead, the objective is to explain that any individual aspect or requirement of the Amendments has the potential to “enhance” one or more of the qualitative characteristics.

B6A separate comparative consideration of whether the Amendments are likely to enhance or maintain the quality of financial reporting is included within the UK long term public good assessment in Table 4.

True and fair view assessment

B7The first adoption criterion, set out in Regulation 7(1) of SI 2019/685, states that an international accounting standard can only be adopted if:

“[….] the standard is not contrary to either of the following principles—

1. an undertaking’s accounts must give a true and fair view of the undertaking’s assets, liabilities, financial position and profit or loss;
2. consolidated accounts must give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the accounts taken as a whole, so far as concerns members of the undertaking; [….]”

B8For the sake of brevity, UKEB refers to the assessment against this endorsement criterion as ‘the true and fair view assessment’ and to the principles set out in Regulation 7(1)(a) as the ‘true and fair principle’. However, these abbreviated expressions do not imply that the assessment has considered anything other than the full terms of the endorsement criterion set out above.

B9The duty of the UKEB under Regulation 7(1)(a) is to determine generically, whether that standard is ‘not contrary’ to the true and fair principle. In other words, it is an ex-ante assessment. The UKEB has therefore considered whether the Amendments contain any requirements that would prevent accounts prepared using the Amendments from giving a true and fair view.

B10The approach is to determine whether the Amendments are not contrary to the true and fair principle in respect of any of the specific items identified in Regulation 7(1)(a) (namely, the assets, liabilities, financial position and profit or loss) in the context of the preparation of the accounts as a whole. A holistic approach has been taken to this assessment, considering the impact of the Amendments taken as a whole, including its interaction with other UK-adopted international accounting standards.

B11For the purposes of the assessment, the UKEB considers the requirement in paragraph 6A of IAS 8 Basis of Preparation of Financial Statements to ‘present fairly the financial position, financial performance and cash flows of an entity’¹⁴ to be equivalent to the Companies Act 2006 requirement for accounts to give a true and fair view.

B12This assessment is separate from the duty of directors under section 393(1) of the Companies Act 2006, which requires directors to be satisfied that a specific set of accounts gives a true and fair view of an undertaking’s or group’s assets, liabilities, financial position and profit or loss.

Do the Amendments lead to a Significant Change in Accounting Practice?

B13A standard adopted by the UKEB under Regulation 6 of SI 2019/685 that it considers is likely to lead to a ‘significant change in accounting practice’, is subject to the requirements in paragraph 3 of Regulation 11 of SI 2019/685. This requires the UKEB to:

1. carry out a review of the impact of the adoption of the standard; and
2. publish a report setting out the conclusions of the review no later than 5 years after the date on which the standard takes effect (being the first day of the first financial year in respect of which it must be used)”.

B14Paragraphs 9–11 discusses whether the Amendments lead to a significant change in accounting practice.

Contact Us

UK Endorsement Board
1 Harbour Exchange | London | E14 9GE
www.endorsement-board.uk

---

Appendix B: Invitation to Comment

Call for comments on Draft Endorsement Criteria Assessment of Amendments to the Fair Value Option for Investments in Associates and Joint Ventures (Amendments to IAS 28)

Deadline for completion of this Invitation to Comment:
Close of business, Friday 13 November 2026

Please submit to:
[email protected]

Introduction

The objective of this Invitation to Comment is to obtain input from stakeholders on the endorsement and adoption of Amendments to the Fair Value Option for Investments in Associates and Joint Ventures (Amendments to IAS 28) (Amendments), published by the International Accounting Standards Board (IASB) in June 2026. The Amendments clarify that similar entities include those that have a main business activity of investing in particular types of assets (as set out in paragraph 49(a) of IFRS 18 Presentation and Disclosure in Financial Statements) is eligible to elect the fair value option in IAS 28 Investments in Associates and Joint Ventures.

At the date of initial application of IFRS 18, an entity eligible to apply paragraph 18 of IAS 28 is permitted to change its election for measuring an investment in an associate or joint venture from the equity method to fair value through profit or loss in accordance with IFRS 9. If an entity makes such a change, the entity shall apply the change retrospectively applying IAS 8.

The information collected from this Invitation to Comment is intended to help with the endorsement assessment.

UK endorsement and adoption process

The requirements for UK adoption are set out in Statutory Instrument 2019/685¹⁵.

The powers to formally adopt international accounting standards for use in the UK were delegated to the UK Endorsement Board in May 2021¹⁶.

Who should respond to this Invitation to Comment?

Stakeholders with an interest in the quality of accounts prepared in accordance with IFRS Accounting Standards.

How to respond to this Invitation to Comment

Please download this document, answer any questions on which you would like to provide views, and return it to [email protected] by close of business on Friday 13 November 2026.

Brief responses to individual questions are welcome, as well as comprehensive responses to all questions.

Privacy and other policies

The data collected through submitting this document will be stored and processed by the UKEB. By submitting this document, you consent to the UKEB processing your data for the purposes of influencing the development of and adopting IFRS for use in the UK. For further information, please see our Privacy Statements and Notices and other Policies (e.g. Consultation Responses Policy and Data Protection Policy)17.

The UKEB’s policy is to publish on its website all responses to formal consultations issued by the UKEB unless the respondent explicitly requests otherwise. A standard confidentiality statement in an e-mail message will not be regarded as a request for non-disclosure. If you do not wish your signature to be published, please provide the UKEB with an unsigned version of your submission. The UKEB prefers to publish responses that do not include a personal signature. Other than the name of the organisation/individual responding, information contained in the “Your Details” document will not be published. The UKEB does not edit personal information (such as telephone numbers, postal or e-mail addresses) from any other response document submitted; therefore, only information that you wish to be published should be submitted in such responses.

Assessment against endorsement criteria

Our draft assessment [tentatively] concludes that:

• the Amendments meet the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c));
• application of the Amendments is not contrary to the principle that an entity’s accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)); and
• that the Amendments are likely to be conducive to the long term public good in the UK as required by SI 2019/685 (see Regulation 7(1)(b)), having considered:
  • whether they will generally improve the quality of financial reporting;
  • the costs and benefits that are likely to result from their use; and
  • whether they are likely to have an adverse effect on the economy of the UK, including on economic growth.

Our assessment of the Amendments is set out in Tables 1–4 of the [Draft] Endorsement Criteria Assessment ([Draft] ECA).

Your details

1. Name: Click or tap here to enter text.
2. Email address: Click or tap here to enter text.
3. Are you responding:
   • On behalf of an organisation [ ]
   • As an individual [ ]
4. If responding on behalf of an organisation,
   Name of organisation: Click or tap here to enter text.
5. Please select what best describes the organisation:
   • An organisation applying IFRS Accounting Standards [ ]
   • A user of company accounts prepared under IFRS [ ]
   • An accounting firm / auditor [ ]
   • A regulator [ ]
   • Other [ ]
     If your response was ‘Other’, please describe: Click or tap here to enter text.
6. Is your organisation a listed entity?
   • UK listed [ ]
   • UK AIM listed [ ]
   • Other listed [ ]
   • Unlisted [ ]
7. Would you be happy for UKEB to contact you if needed to discuss your responses?
   • Yes [ ]
   • No [ ]

---

Questions

Technical accounting criteria assessment

1. Do you agree with the draft assessment of the Amendments against the technical accounting criteria? Please select one option. Please explain why or why not.
   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

True and fair view

1. Do you agree with the draft assessment that the Amendments are not contrary to the true and fair view requirement? Please select one option. Please explain why or why not.
   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

UK long term public good

1. Do you agree with the initial overall assessment of costs and benefits likely to arise from the Amendments? Please select one option. Please explain why or why not.

   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

2. Do you agree with the draft assessment that the Amendments are likely to be conducive to the long term public good in the UK? Please select one option. Please explain why or why not.

   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

3. Do you have any other comments you would like to add?
   Click or tap here to enter text.

Impact on UK entities

1. Are you a preparer of financial statements that could be affected by the Amendments?

   • Yes [ ]
   • No [ ]

2. Are you aware of any UK entities that could be affected by the Amendments? If you have answered ‘yes’, which sector do these entities operate in?

   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

3. In your opinion, is there a risk that the Amendments could inadvertently narrow the scope of IAS 28’s fair value option among UK preparers? Please explain why or why not.

   • Yes [ ]
   • No [ ]
     Click or tap here to enter text.

Response generation

1. Did you/your organisation use a large language model (e.g. ChatGPT, Microsoft Copilot) to create any part of your/its response (response to this Invitation to Comment or a comment letter you are submitting as part of your response)?

   • Yes [ ]
   • No [ ]

2. If you answered yes to the question above, please specify which model and what prompt(s) you used for the large language model.
   Click or tap here to enter text.

Thank you for completing this Invitation to Comment
Please submit this document by close of business on Friday 13 November 2026 to:
[email protected]

---

Footnotes