The IASB has several projects on the equity method of accounting that involve the transfer of assets between an investor and its associate or joint venture. This paper provides a commentary on this issue by providing example of alternative methods of adjusting for inter‐company profits. The IASB has several projects on the equity method of accounting that involve the transfer of assets between an investor and its associate or joint venture. This paper provides a commentary on this issue by providing examples of alternative methods of adjusting for inter‐company profits. The underlying concepts for alternative approaches are discussed. The conclusion outlines the steps the IASB needs to take to resolve this issue.