Related Party Combinations – PEAC
At its meeting on May 10, 2022, the PEAC received an update on the Related Party Combinations project. The Committee discussed which issues in accounting for combinations between businesses under common control are a high priority. The Committee also discussed whether the AcSB should consider a phased approach to expedite standard setting, addressing some issues now and other issues at a later time.Committee members supported the proposal to amend Related Party Transactions, paragraph 3840.44(a), to remove reference to the exchange amount to clarify that business combinations under common control meeting the criteria in paragraph 3840.29 would only be subject to requirements in Section 1582, Business Combinations. Committee members agreed that this proposal is unlikely to change current practice as the exchange amount in business combinations under common control approximates the fair value.Some Committee members suggested that additional guidance regarding business combinations between related companies that are not under common control would be useful to preparers.Several Committee members indicated that addressing the requirement in paragraph 3840.44(b) to retroactively restate comparatives is a high priority item. Providing optionality over the retroactive restatement would allow entities to meet user needs and provide relief from added reporting.The AcSB will consider the Committee’s feedback at the July 2022 Board meeting.
Review the meeting notes on the AcSB's Web site.