Deloitte comment letters on IFRS Interpretations Committee agenda decisions
Aug 15, 2011
Deloitte's IFRS Global Office has submitted letters of comment on the following tentative agenda decisions discussed at the July 2011 IFRS Interpretations Committee meeting:
- IAS 27 — Consolidated and Separate Financial Statements — Group reorganisations in separate financial statements (PDF 29k)
- IFRS 3 — Business Combinations - Acquirer in a reverse acquisition (PDF 23k)
- IFRS 3 — Business combinations involving newly formed entities: business combinations under common control (PDF 23k)
- IFRS 3 — Business combinations involving newly formed entities: factors affecting identification of the acquirer (PDF 26k)
We agree with the tentative agenda decisions made by the Committee, with the exception of the tentative decision not to take onto the IFRIC's agenda requests for Interpretations of IFRS 3 Business Combinations, with respect to providing guidance on the circumstances or factors that are relevant when identifying an acquirer in a business combination under IFRS 3 in the context of a situation where a group plans to spin off subsidiaries using a new entity and the acquisition of the subsidiaries by the new entity is conditional upon completion of an initial public offering. An extract from this comment letter follows:
|We do not agree with the Committee's decision to deal with this issue, which is widespread in certain jurisdictions (albeit not, as noted in the tentative agenda decision, in many others) and for which we have seen real diversity in practice, through a rejection notice. Whilst we agree that a reasonable analysis of the requirements of IFRS 3 is presented in the tentative agenda decision, there would be significant transitional issues for entities that have previously applied a different treatment. Accordingly, any clarification of the treatment of transactions such as those described in the tentative agenda decision should be carefully considered, including consideration of potential changes in practice that may result and the need for transitional provisions. We believe that a full interpretation or an amendment to IFRS 3 via the Annual Improvements Project would be more suitable for these purposes than an IFRIC rejection notice.|
All of our comment letters are available on our comment letter page.
Click for our July 2011 IFRS Interpretations Committee meeting notes.