)

The Board reaffirmed the proposal in the Improvements ED that if an entity acquires less than a 100% interest in another entity, both the acquirer's and the minority interest's share of goodwill should be recognised. Under IAS 22 currently, only the acquirer's share of goodwill is recognised. To illustrate, if P pays 900 for a 60% interest in S, and on that date the fair value of S's identifiable net assets is 1,200 and the full fair value of S is 1,500, goodwill of 300 will be recognised in consolidation (1,500 - 1,200). Minority interest of 600 will be recognised (40% x 1,500).

The IASB is working on this project jointly with the US Financial Accounting Standards Board. While the two Boards have reached consistent decisions on the fundamental principles for applying the purchase method, their views have diverged on certain issues. The following issues have been identified as areas of current divergence that potentially can be eliminated before the two Boards publish their exposure drafts:

• The treatment of blockage factors in the initial measurement of equity consideration.
• The treatment of amendments to post-employment benefit plans that are a condition of the business combination.
• The treatment of intended changes by the acquirer to employee benefit and other post-retirement benefit plans.
• The treatment of constructive obligations.
• The treatment of an intangible that becomes separable (and therefore eligible for separate recognition apart from goodwill) after the business combination.