The Board considered an issue that arose during the drafting of the pre-ballot version of the IFRS on business combinations. The issue relates the Board's decision that the IFRS should not apply to the accounting for the following transactions until guidance on the application of the purchase method to those transactions has been issued by the Board. These transactions are:

• business combinations involving two or more mutual entities; and
• business combinations in which separate entities or businesses are brought together to form a reporting entity by contract only without the obtaining of an ownership interest (for example, combinations in which separate entities are brought together by contract only to form a dual-listed corporation).

The staff proposed that the reference to these transactions being accounted for under IAS 22 be removed, the scope exemption under "IFRS 3"be retained, and the entity be consequently required to select appropriate accounting policies under the guidance in IAS 8.

The Board agreed with removing the reference to IAS 22 and withdrawing it completely. However, they agreed to scope these entities into "IFRS 3" except for goodwill (vote 13-1). The Board agreed that this should be exposed. It was noted that initially these entities would be scoped out of "IFRS 3", which could be amended subject to the results of the exposure draft, but IAS 22 would be withdrawn.