The definition of an investment entity

Learning objectives

• Identify the three elements of the definition of an investment entity.L3
• Justify whether or not an entity meets the definition.L3

Normative references

• IFRS 10 §27A parent determines whether it is an investment entity: an entity that obtains funds from investors for the purpose of providing them with investment management services, commits to them that its business purpose is to invest funds solely for returns (capital appreciation and / or investment income) and measures and evaluates the performance of substantially all of its investments on a fair value basis.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• The Ancre fund obtains funds from investors to provide them with investment management services; it commits to them to invest solely for returns; and it measures the performance of substantially all its investments on a fair value basis (case data). What is concluded about its status as an investment entity?L3