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AcSB Exposure Draft - Definition of a Business and Accounting for Previously Held Interests (Proposed amendments to IFRS 3 and IFRS 11)

  • IFRS - AcSB Image

Aug 08, 2016

On August 8, 2016, the Accounting Standards Board (AcSB) has issued an Exposure Draft that corresponds to the IASB’s Exposure Draft of proposed amendments to IFRS 3, Business Combinations and IFRS 11, Joint Arrangements, that was issued for comment on June 28, 2016. It clarifies both the definition of a business and how to account for previously held interests. Stakeholders are encouraged to submit their comments by October 31, 2016.

The pro­posed amend­ments pro­vide:

  • clearer ap­pli­ca­tion guid­ance to help dis­tin­guish be­tween a busi­ness and a group of as­sets when ap­ply­ing IFRS 3; and
  • clar­i­fi­ca­tion on how a com­pany should ac­count for pre­vi­ously held in­ter­est in a busi­ness, if ac­quir­ing con­trol, or joint con­trol, of that busi­ness.

The pro­posed amended ap­pli­ca­tion guid­ance on the de­f­i­n­i­tion of a busi­ness in IFRS 3 arises from the Board’s Post-im­ple­men­ta­tion Re­view (PIR) process, which is con­ducted on each Stan­dard and ma­jor amend­ment ap­prox­i­mately two years af­ter their ef­fec­tive dates. The IFRS 3 PIR shows gen­eral sup­port for the ac­count­ing re­quire­ments in the Stan­dard but iden­ti­fies some ar­eas where fur­ther re­search will be un­der­taken. The pro­posed amend­ment to ac­count­ing for pre­vi­ously held in­ter­ests was de­vel­oped through the IFRS In­ter­pre­ta­tions Com­mit­tee.

Ad­di­tional in­for­ma­tion

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