BC10C Some respondents to the Exposure Draft commented that the proposed amendments to paragraphs 4 and 6 of IAS 27 create an inconsistency in the definition of 'separate financial statements', especially for an investor that has investments in associates or joint ventures and no investments in subsidiaries. The financial statements of such an investor in which the investments in joint ventures and associates are accounted for using the equity method would be the investor's primary financial statements as well as its separate financial statements. Consequently, they assert that there could be confusion about the applicability of the disclosure requirements in IAS 27 and IFRS 12. IFRS 12 does not apply to an entity's separate financial statements.

BC10D The Board noted that the financial statements of an investor that has no investments in subsidiaries, and has investments in associates or joint ventures that are required by IAS 28 to be accounted for using the equity method, are not separate financial statements. Consequently, in those financial statements, such an investor is required to comply with the disclosure requirements in IFRS 12. As a logical consequence, such an investor is less likely to prepare separate financial statements in which investments in associates or joint ventures are accounted for using the equity method. If such an investor presents separate financial statements, the Board expects that the investor is likely to account for its investments in associates or joint ventures either at cost or in accordance with IFRS 9.