Business Combinations Phase I

Date recorded:

(continued from 21 January)

The Board discussed the measurement of the recoverable amount of a cash generating unit when the price paid for the CGU is based on projections that include major restructuring costs (which must be excluded from the recoverable amount calculation). The Board was concerned that the current wording in the Exposure Draft would require the recognition of an immediate loss. The Board intends to clarify that a recent price paid for a CGU is likely to be the best source of its fair value to avoid recognition of this immediate loss.

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