Scope of the project (paras. BC222-BC227)
BC222 The Investment Entities ED proposed a limited‑scope exception to consolidation for investment entities. A number of respondents to the Investment Entities ED asked the Board to expand the scope of its proposals.
BC223 Some respondents asked the Board to expand the scope of the project to require an investment entity to measure all of its investments at fair value. However, the Board noted that, in most cases, existing IFRSs require or permit investments held by an investment entity to be measured at fair value. For example an entity:
(a) may elect the fair value option in IAS 40 Investment Property; and
(b) would be required to measure its financial assets at fair value through profit or loss in accordance with IFRS 9 (or IAS 39 [IFRS 9 Financial Instruments replaced IAS 39. IFRS 9 applies to all items that were previously within the scope of IAS 39.]) when those assets are managed on a fair value basis.
Consequently, the Board decided to limit the scope of the project to only providing an exception to consolidation for investment entities.