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Business Combinations under Common Control – International Accounting Standards Board

Date recorded:

At its meeting on June 20-21, 2018, the International Accounting Standards Board (the Board) continued its discussion of current value approaches for business combinations under common control that affect non-controlling shareholders and directed the staff to develop an approach based on the acquisition method set out in IFRS 3 Business Combinations and to consider whether and how that method should be modified to provide the most useful information about business combinations under common control that affect non-controlling shareholders. The Board decided not to explore the 'full fair value approach'. Under that approach, a receiving entity would recognize:

  • a contribution to equity, or a distribution from equity, measured as the difference between the fair value of the consideration transferred and the fair value of the acquired business; and
  • goodwill measured as the excess of the fair value of the acquired business over the identifiable net assets acquired. The Board expects to continue discussion at future meetings on methods of accounting for transactions within the scope of the project.

Review the IASB Update and podcast on the Board's Web site.

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