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IASB completes post-implementation review of IFRS 3

  • IASB document Image

Jun 17, 2015

The IASB has completed its post-implementation review (PIR) of IFRS 3, “Business Combinations.”

The PIR report assessed in­for­ma­tion gathered from academic lit­er­a­ture as well as feedback from (1) investors and other financial statement users and (2) preparers, auditors, and reg­u­la­tors. The review concluded that although there is general support for IFRS 3, views were mixed on certain elements of the standard, including the following:

  • Investors:
    • Subsequent accounting for goodwill.
    • Separate recognition of intangible assets.
    • Measurement of noncontrolling interests.
    • Subsequent accounting for contingent consideration.
  • Preparers, auditors, and regulators:
    • Definition of a business.
    • Fair value measurement.
    • Impairment test for goodwill.
    • Contingent payments to selling shareholders who become employees.

On the basis of the PIR report, the IASB added to its agenda two research projects that will focus on:

  • Effectiveness and complexity of testing goodwill for impairment.
  • Subsequent accounting for goodwill.
  • Challenges related to applying the definition of a business.
  • Identification and fair value measurement of intangible assets such as customer relationships and brand names.

For more information, see the press release and the PIR report on the IASB’s Web site. In addition, see our project page on the PIR of IFRS 3.

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