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Business Combinations under Common Control – International Accounting Standards Board

Date recorded:

At its meeting on September 25, 2019, the IASB met to discuss this research project. The Board tentatively decided that the forthcoming discussion paper on Business Combinations under Common Control (DP) should not propose a single measurement approach for all transactions within the scope of the project. The Board tentatively decided that the forthcoming DP should set out a preliminary view that a current value approach based on the acquisition method should be required for transactions within the scope of the project that affect non-controlling shareholders of a receiving entity unless equity instruments of the receiving entity are not traded in a public market and one of the following conditions applies:

  1. all non-controlling shareholders are the receiving entity’s related parties; or
  2. the receiving entity chooses to apply a predecessor approach and all its non-controlling shareholders have been informed about, and not objected to, the receiving entity applying that approach.

The Board tentatively decided that the forthcoming discussion paper should propose a predecessor approach for all other transactions within the scope of the project. The Board will discuss at future meetings how a current value approach based on the acquisition method and a predecessor approach should be applied, and what information should be provided in the notes to financial statements.

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

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