G4+1 Study Title: Recommendations for Achieving Convergence on the Methods of Accounting for Business Combinations
Published: December 1998

The G4+1 Position Paper is solely concerned with the topic of convergence on the methods of accounting for business combinations. Therefore it does not address detailed points of application of those methods, even though it acknowledges that there is considerable divergence today in the procedures for applying both the uniting of interests (pooling) and acquisition (purchase) methods.

In considering the methods of accounting for business combinations, the following fundamental issues are addressed by the Position Paper:

• Whether a single method of accounting for business combinations is preferable to two (or more) methods;
• If so, which method of accounting should be applied to all business combinations;
• If not, which methods should be applied and to which combinations they should be applied.

The G4+1 Position Paper concludes that:

• The use of a single method of accounting is preferable, and
• The purchase method is the appropriate method.

Related IASB Agenda Project: Business Combinations