IFRS 3 Business Combinations currently governs reporting requirements for acquisitions. However, that standard does not specify how to report transactions that involve transfers of businesses between companies under common control (for example, companies in the same group).. To tackle this, the IASB introduced a discussion paper in November 2020 to increase transparency and uniformity in reporting such transactions.

The project summary clarifies the reasoning behind the board’s decision, made in November 2023, not to proceed with developing reporting requirements for BCUCCs.

The IASB recognized the varied reporting practices for BCUCCs and understood from investor feedback that they could manage this diversity. The wide range of investor information requirements across jurisdictions complicates the creation of universal reporting standards. Moreover, the IASB’s research indicated that while potential enhancements to financial reporting could arise from the development of BCUCC reporting requirements, the associated costs of implementing such changes would likely outweigh the benefits.

Access the press release and the project summary on the IASB’s website.