Common control transactions
Background
This project is designed to address accounting for transactions between entities that are ultimately controlled by the same party or parties (so-called 'common control transactions').
As business combinations of entities under common control are currently excluded from the scope of IFRS 3 Business Combinations, companies account for such transactions in different ways. This makes it difficult for investors and regulators to compare the effects of those transactions on companies' financial positions and performances. The IASB's research project is therefore aimed at potentially filling this gap in IFRSs to improve the comparability and transparency of reporting these combinations. The forthcoming discussion paper is intended to help the IASB assess whether it can develop requirements that would improve the comparability and transparency of accounting for combinations under common control.
Note: The IFRS Interpretations Committee has considered numerous issues related to common control transactions, often declining to add these matters to its agenda in favour of referring it to the IASB for consideration as part of this project. This page also includes these discussions for reference purposes.
Current status of the project
This project has been completed. The IASB published a concluding project summary on 17 April 2024.
Acknowledging the existing diversity in reporting practices surrounding BCUCCs, the IASB noted feedback from investors indicating their ability to navigate this diversity effectively. The information sought by investors varies significantly across jurisdictions, posing a challenge to the development of globally applicable reporting standards tailored to meet diverse user needs.
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.
Project milestones
| Date | Development | Comments |
|---|---|---|
| December 2007 | Added to the IASB's agenda | |
| December 2012 | Reactivated as an IASB-only research project | Discussion Paper to be published before an agenda decision is made |
| 30 November 2020 | DP/2020/2 Business Combinations under Common Control published | Comments requested by 1 September 2021 |
| 17 April 2024 | Project concluded by publishing a project summary | Acknowledging the existing diversity in reporting practices surrounding BCUCCs, the IASB noted feedback from investors indicating their ability to navigate this diversity effectively. The information sought by investors varies significantly across jurisdictions, posing a challenge to the development of globally applicable reporting standards tailored to meet diverse user needs. 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. |
