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Post-implementation review of IFRS 3

Date recorded:

The project manager introduced agenda paper 13A which contains the input obtained from the activities undertaken during phase I of the Post-implementation Review (PiR) of IFRS 3 Business Combinations and agenda paper 13B which includes the questions that the staff believe the Request for Information (RfI) should focus on.

The objective of the session is to obtain feedback from the Board members on both papers to prepare for the next phases.

Paper 13A includes the results of consultations obtained from several constituents and are presented by subject. Each subject is classified by relevance (high, low and medium) and for those subjects that are classified as medium or highly relevant there are questions assigned in paper 13B. The subjects included in paper 13B are (i) definition of a business; (ii) fair value measurement; (iii) accounting for intangible assets and goodwill, specifically the separate recognition of intangible assets and non-amortisation of indefinite life intangible assets and goodwill; (iv) non-controlling interest; (v) step acquisition and disclosures. In addition the staff paper suggests including three general questions to help understand the background and experience of respondents, whether the user identifies other relevant areas to be included and benefits and costs when implementing the standard. There are no questions related to the pooling of interest method because the staff has not heard any concern regarding the removal of this method from IFRS 3.

One Board member expressed that it will be important to know the actual experiences from respondents because academic experience is different from practical experience.

One Board member expressed concern that the PiR should not be used to reconsider the entire project. It seems to suggest that there is an expectation that all questions will be addressed.

One Board member requested clarification as to how the responses will be obtained.

The project manager explained that a questionnaire will be set using a formal document and there will be a response period similar to an exposure draft.

One Board member said that it will be important that users provide examples with actual evidence so that they can properly evaluate the responses.

One Board member inquired about the interaction of papers 13A and 13B because respondents will only get 13B and will not have all the background. The project manager responded that constituents could have access to the paper or have a link.

One Board member mentioned that it will be important to know what accounting policy choices were made to understand the basis on which they are responding.

Next steps

The project manager explained that they will prepare a revised version of the questionnaire based on the comments provided by the Board members and it will be available in December. The expectation is to have the document published for public comments by the end of January or February 2014. The steps for the second phase are yet to be determined.

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