BC1 This Basis for Conclusions summarises the International Accounting Standards Board's considerations in developing IFRS 12 Disclosure of Interests in Other Entities. Individual Board members gave greater weight to some factors than to others.

BC2 Users of financial statements have consistently requested improvements to the disclosure of a reporting entity's interests in other entities to help identify the profit or loss and cash flows available to the reporting entity and determine the value of a current or future investment in the reporting entity.

BC3 They highlighted the need for better information about the subsidiaries that are consolidated, as well as an entity's interests in joint arrangements and associates that are not consolidated but with which the entity has a special relationship.

BC4 The global financial crisis that started in 2007 also highlighted a lack of transparency about the risks to which a reporting entity was exposed from its involvement with structured entities, including those that it had sponsored.

BC5 IFRS 12 addresses the disclosure of a reporting entity's interests in other entities when the reporting entity has a special relationship with those other entities, ie it controls another entity, has joint control of or significant influence over another entity or has an interest in an unconsolidated structured entity.