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Business combinations – Phase I

Background

The IASB business combinations project has two phases.

This page deals with the first phase of the project. Click for information about Phase II of the business combinations project.

Topics discussed in the first phase

The IASB began a project to review IAS 22 Business Combinations as part of its initial agenda, with the objective of improving the quality of accounting for business combinations and achieving international convergence.

The IASB's primary focus in the first phase of the business combinations project was on these topics:

  • the method of accounting for business combinations
  • the initial measurement of identifiable assets acquired and liabilities and contingent liabilities assumed
  • recognition of liabilities for termination or reducing the activities of an acquiree
  • treatment of any excess of the acquirer's interest in the fair value of the identifiable net assets acquired over the cost of the combination
  • accounting for goodwill and intangible assets acquired in a business combination

 

Current status of the project

This project has been completed. IFRS 3 Business Combinations, and revised versions of IAS 36 Impairment of Assets and IAS 38 Intangible Assets, were issued on 31 March 2004.

 

Project milestones

DateDevelopmentComments
5 December 2002

Exposure Drafts published:

  • ED 2 Business Combinations
  • Proposed Amendments to IAS 36 and IAS 38
Comment deadline 4 April 2003
31 March 2004 IFRS 3 Business Combinations issued Applies to business combinations for which the agreement date is on or after 31 March 2004
31 March 2004 Revised IAS 36 Impairment of Assets issued Effective from the beginning of the first annual period beginning on or after 31 March 2004 and to goodwill and intangible assets acquired in business combinations for which the agreement date is on or after 31 March 2004
31 March 2004 Revised IAS 38 Intangible Assets issued Effective from the beginning of the first annual period beginning on or after 31 March 2004 and to intangible assets acquired in business combinations for which the agreement date is on or after 31 March 2004