Business Combinations Phase II

Date recorded:

The staff asked the board to consider whether, as a consequence of the decision to report net profit before eliminating minority share of profit, there should be a change in the numerator in EPS. The Board did not support the proposal.

The Board agreed to consider whether adjustments to equity for changes in a parent's controlling interest should impact EPS calculations.

The Board agreed that the exposure draft for Phase 2 will explicitly state that control can pass to an entity by means other than the acquisition of shares and should be accounted for in the same manner as when control is acquired through the acquisition of shares.

The Board agreed similarly that the same result would arise if control was lost when no shares were sold.

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