SIC-3
Historical
Elimination of Unrealised Profits and Losses on Transactions with Associates
Clarified how to measure the investor's share of unrealised profits and losses on transactions with associates under the equity method. Withdrawn in 2003.
Historical Reference
SIC-3 was withdrawn in March 2003 when the IASB issued a revised IAS 28 Investments in Associates, which incorporated the elimination of unrealised profits and losses on transactions with associates directly into the equity method guidance.
This page is retained for historical and comparative reference. Entities should refer to the current standard that superseded this interpretation for authoritative guidance.
Current Standard
IAS 28 Investments in Associates and Joint Ventures 1
What SIC-3 Addressed (Historical)
What SIC-3 addressed
SIC-3 addressed how to measure the investor's share of unrealised profits and losses on transactions with associates under the equity method. It clarified whether unrealised profits and losses should be eliminated in full or only to the extent of the investor's interest in the associate.
2
The Conclusion It Reached (Historical)
The conclusion it reached
SIC-3 concluded that unrealised profits and losses should be eliminated to the extent of the investor's interest in the associate. The portion of unrealised profits and losses attributable to any remaining investment in the associate should be recognised in the investor's profit or loss. The investor's share of the associate's profit or loss is adjusted accordingly.
3
Where This Guidance Lives Today
Where this guidance lives today
Superseded byIAS 28 Investments in Associates and Joint Ventures
Why withdrawnThe 2003 revision incorporated the elimination principle directly into the equity method guidance
Current statusWithdrawn
4
Glossary
Equity method
A method of accounting whereby an investment in an associate is initially recognised at cost and subsequently adjusted for the post-acquisition change in the investor's share of net assets of the associate.
Unrealised profit
A profit earned on a transaction with an associate that has not yet been realised through a transaction with an external party, and therefore must be eliminated under the equity method.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows
History & Development
Jan-1997
In January 1997 the Standing Interpretations Committee issued SIC-3 Elimination of Unrealised Profits and Losses on Transactions with Associates.
Apr-2001
In April 2001 the International Accounting Standards Board adopted SIC-3.
Minor consequential amendment to SIC-3
Mar-2003
In March 2003 the Board issued a revised IAS 28 Investments in Associates which superseded SIC-3.
Superseded by revised IAS 28