Reference to the Conceptual Framework

Date recorded:

Transition, effective date and due process (Agenda Paper 10)

In May 2019, the Board published ED/2019/3 Reference to the Conceptual Framework, which proposed amendments to IFRS 3. The comment period has now closed.

A summary of the proposals can be found here.

With regard to transition, the ED proposed:

  • to require an entity to apply the amendments prospectively, that is to business combinations for which the acquisition date is on or after the beginning of the annual reporting period in which the amendments become effective
  • to permit an entity to apply the amendments earlier if at the same time the entity also applies all the amendments made by Amendments to References to the Conceptual Framework in IFRS Standards; and
  • not to require an entity that applies the amendments early to disclose that it has done so.

All respondents to the ED expressed unqualified support for the transition provisions, except one accounting firm, which disagreed with the proposal not to require disclosure of early application. However, the staff continue to hold their view that early application should not have to be disclosed. The staff therefore recommend to finalise the transition requirements without changes to the ED.

The staff are satisfied that all due process steps have been met and asked for the permission to begin the balloting process. They recommended an effective date of 1 January 2022.

Board voting

All Board members agreed to confirm the ED proposals (as detailed above).

All Board members agreed that the amendments do not require re-exposure, the amendments should apply for annual reporting periods beginning on or after 1 January 2022 and that all due process requirements have been undertaken.

No Board member intends to dissent from the issuance of the amendments.

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