BC60 The exposure draft proposed retrospective application of the requirements. In its redeliberation of ED 9, the Board observed that entities affected by the changes introduced by the IFRS would have enough time to prepare to apply the new requirements retrospectively. The Board was informed of a few cases in which entities, on the basis of their analysis of the proposals in ED 9, had already changed their accounting for interests in joint arrangements retrospectively, taking advantage of the accounting option that IAS 31 offered to jointly controlled entities.

BC61 However, in its discussions, the Board considered the views of some respondents to ED 9 who had expressed their concern about applying the requirements retrospectively, because of undue cost and effort. In response to these concerns, the Board decided that in the case of changing from proportionate consolidation to the equity method, an entity should not adjust retrospectively any differences between the accounting methods of proportionate consolidation and equity method, but should instead aggregate the carrying amounts of the assets and liabilities, including any goodwill arising from acquisition, that the entity had previously proportionately consolidated into a single line investment as at the beginning of the earliest period presented.

BC62 The Board also decided that the opening balance of the investment should be tested for impairment in accordance with paragraphs 40–43 of IAS 28 (as amended in 2011), with any resulting impairment loss being adjusted against retained earnings at the beginning of the earliest period presented.