The proposals in the Exposure Draft respond to stakeholder feedback that reporting on acquisitions poses difficulties for both investors and companies:

• Investors lack sufficient and timely information about acquisitions and post-acquisition performance.
• Companies seek to provide useful information to investors but see risks and costs in providing some information, particularly commercially sensitive information that could be used by competitors.

Stakeholders have expressed concerns regarding the complexity and effectiveness of the impairment test for operations with allocated goodwill. In response, the IASB is proposing amendments to IFRS 3 Business Combinations. These changes would mandate companies to disclose objectives and performance targets of significant acquisitions, along with their subsequent achievements. Additionally, information on expected synergies for all material acquisitions would be required, with safeguards in place to protect sensitive acquisition objectives. The proposed amendments also include targeted improvements to the impairment test under IAS 36 Impairment of Assets.

The IASB is inviting feedback on the Exposure Draft Business Combinations—Disclosures, Goodwill and Impairment by July 15, 2024.

Access the press release and the exposure draft on the IASB’s website.