IAS 39 — Scope of IAS 39 paragraph 2(g)
The IFRIC received a request for guidance on the appropriate interpretation of IAS 39 paragraph 2(g). This paragraph exempts from the scope of IAS 39 ‘contracts between an acquirer and a vendor in a business combination to buy or sell an acquiree at a future date.’ The request asked whether this scope exception applies only to binding contracts to acquire shares that constitute a controlling interest in another entity within the period necessary to complete a business combination, or if it applies more widely. The request also asked for guidance on whether the scope exception could be applied to other similar transactions, such as those to acquire an interest in an associate.
Decision not to add
The IFRIC acknowledged that the wording in paragraph 2(g) of IAS 39 is ambiguous and could lead to diversity in practice.
For this reason, the IFRIC decided to ask the Board to clarify the standard, addressing in particular:
- whether the scope exception in paragraph 2(g) applies to all contracts (including options) between an acquirer and a vendor in a business combination to buy or sell an acquiree at a future date.
- whether the scope exception provided in paragraph 2(g) could be applied to similar transactions, such as those to acquire an interest in an associate.
IFRIC reference: IAS 39-16