Business Combinations – Disclosures, Goodwill and Impairment (Possible Amendments to IFRS 3 and IAS 36) [ED]
| Comments are requested by July 15, 2024 | |
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Next steps: |
The IASB will begin considering the comments received in H2 2024 |
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Last updated: |
March 2024 |
Overview
The objective of this research project was to consider how to address the following three areas of focus identified in the Post-implementation Review (‘the PIR’) of IFRS 3 Business Combinations:
- investors receiving insufficient information about the performance of acquisitions;
- impairment tests being costly and complex;
- impairment losses on goodwill sometimes being recognized too late; and
The IASB has been exploring these concerns in this project which has resulted in developing the proposals in the Exposure Draft Business Combinations—Disclosures, Goodwill and Impairment, which was published in March 2024.
The Exposure Draft sets out a package of proposals that in the IASB’s view would result in companies providing better information—at a reasonable cost—about acquisitions, thereby responding to stakeholder concerns.
The Exposure Draft contains proposed changes to IFRS 3 and IAS 36.
The proposed changes to IFRS 3 would:
- result in companies providing information to investors about the performance of an acquisition.
- allow investors to directly assess the performance of acquisitions, rather than using goodwill impairment as a proxy indicator. These proposed changes would therefore respond to concerns about impairment losses sometimes being recognized too late.
The proposed changes to IAS 36 would also respond to concerns about impairment losses sometimes being recognized too late and concerns about the cost and complexity of the impairment test.
The IASB is requesting feedback about:
- whether the proposed changes to IFRS 3 appropriately balance the benefits of requiring a company to make the proposed disclosures and the costs of doing so; and
- whether the proposed changes to the impairment test in IAS 36 would improve the effectiveness of the impairment test and reduce the cost and complexity of applying the test.
- For further details, visit the project page on the IASB’s Web site.
Other developments
September 2023
On September 26, 2023, the IASB staff updated the work plan to indicate that the Board plans to issue an Exposure Draft in Q1/2024.
December 2022
In December 2022, the IASB decided to change the name of the project from Goodwill and Impairment to Business Combinations—Disclosures, Goodwill and Impairment.
At its meeting on December 13, 2022, the IASB decided to add this standard-setting project to its agenda.
September 2022
On September 26, 2022, the IASB staff updated the work plan to indicate that the Board plans to decide the project direction in November 2022.
June 2022
On June 27, 2022, the IASB staff updated the work plan to indicate that the Board plans to decide the project direction in Q4/2022.
December 2021
On December 17, 2021, the IASB staff updated the work plan to indicate that the IASB plans to decide the project direction in H2/2022.
November 2021
On November 23, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in Q2/2022.
October 2021
On October 29, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in Q1/2022.
September 2021
On September 27, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in the first half of 2022.
July 2021
On July 23, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in September 2021.
May 2021
On May 28, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to decide the project direction in Q3/2021.
April 2021
On April 30, 2021, IASB staff updated the Work Plan to indicate that the Board plans to review the Discussion Paper Feedback in May 2021.
March 2021
On March 26, 2021, IASB staff updated the Work Plan to indicate that the Board plans to review the Discussion Paper Feedback in April 2021.
January 2021
On January 29, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to review the Discussion Paper Feedback in March 2021.
September 2020
On September 28, 2020, IASB staff updated the Work Plan to indicate that the Board plans to review the Discussion Paper Feedback in Q1/2021.
April 2020
On April 17, 2020, IASB staff updated the Work Plan to indicate that the Board plans to review the Exposure Draft feedback in the 1st half of 2021. The comment period on the Exposure Draft was also extended by the IASB to December 31, 2020.
March 2020
On March 21, 2020, the IASB staff updated the work plan to indicate that the Board plans to discuss the feedback on its Discussion Paper in the second half of 2020.
On March 19, 2020, the IASB published a comprehensive discussion paper DP/2020/1 Business Combinations — Disclosures, Goodwill and Impairment. The IASB's related project aims at improving the information companies provide to investors, at a reasonable cost, about the businesses those companies buy and would help to hold management to account for its decisions to acquire those businesses. In this context, the IASB is investigating possible improvements to IFRS 3, Business Combinations and IAS 36, Impairment of Assets. The comment period on the discussion paper ends on September 15, 2020.
February 2020
On February 28, 2020, the IASB staff updated the work plan to indicate that the IASB plans to issue a Discussion Paper in March 2020.
December 2019
On December 13, 2019, the IASB staff updated the Work Plan to indicate that the IASB plans to issue a Discussion Paper in February 2020.
October 2019
On October 1, 2019, the IASB® staff updated the work plan to indicate that the Board expects to issue a Discussion Paper in Q1/2020.
July 2019
On July 29, 2019, the IASB® staff updated the work plan to indicate that the Board expects issue a Discussion Paper in Q4/2019.
January 2019
On January 25, 2019, the IASB® staff updated the work plan to indicate that the Board expects to issue a Discussion Paper in the second half of 2019.
December 2018
On December 14, 2018, the IASB® staff updated the work plan to indicate that the Board expects to issue a Discussion Paper or Exposure Draft in the second half of 2019.
May 2018
On May 25, 2018, the IASB staff updated the work plan to indicate that the Board expects to issue a Discussion Paper or Exposure Draft at some date in the future (no date specified).
January 2018
On January 26, 2018, the IASB Staff updated this project to indicate that the IASB now expects to issue a Discussion Paper or Exposure Draft in the second half of 2018.
November 2017
On November 16, 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue a Discussion Paper or Exposure Draft in the first half of 2018.
June 2017
In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue a Discussion Paper in the 1st half of 2018.
March 2017
On March 23, 2017, the IASB staff issued an updated Work Plan which indicates that the IASB expects to decide the project direction after September 2017.
December 2016
On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to decide the project direction after June 2017.
September 2016
On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to decide the project direction by March 31, 2017.
