BC294 Before the exception to consolidation for investment entities was issued, IFRS 10 (and its predecessor, IAS 27) required reporting entities to consolidate all controlled entities, regardless of the nature of the reporting entity. Consequently, the assets, liabilities and non‑controlling interests of each subsidiary were aggregated with those of the parent to represent the group of entities as a single reporting entity.
BC295 Respondents to ED 10 argued that an investment entity often holds non‑controlling investments in some entities that are reported at fair value, as well as subsidiaries that are consolidated in accordance with current principles in IFRS. Reporting investments on more than one basis hinders comparability within the financial statements, because all investments are held by an investment entity for a similar purpose - capital appreciation, investment income, or both. In addition, some of the items consolidated would be measured at historical cost, which disto
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