Business Combinations II

Date recorded:

(afternoon only)

The IASB began redeliberating the exposure drafts that it published as part of the Business Combinations Phase II project in conjunction with the US Financial Accounting Standards Board (FASB).

Together, the IASB and the FASB received 282 comment letters in total on the Business Combination ED and held roundtable discussions with approximately 50 of those respondents. 95 comment letters were received on the IAS 27 ED.

The staff stated that the purpose of the day's discussions was to seek the Board's consent on the direction that the staff intends to take regarding the various issues raised. The purpose was not to discuss the detailed technical points with a view to making decisions. Detailed analysis of each issue will be brought before the Board at subsequent meetings for consideration by the Board.

The Board was asked to review the primary objective of the business combinations project, which was defined as:

To develop a single high-quality standard for accounting for business combinations that can be used for both domestic and cross-border financial reporting.

To accomplish that objective, the staff plan to develop FASB and IASB standards on business combinations and non-controlling interests that:

  • 1. Are converged on a common set of principles that provide decision-useful information.
  • 2. Contain converged guidance that minimizes exceptions to those principles.
  • 3. Are written in plain English, and use the same language to the extent possible to minimise differences in the application in the US and internationally.
  • 4. Provide authoritative implementation/application guidance to the extent necessary for consistent application by different entities.

The Board confirmed that the objective and the staff's approach to achieve that objective are still appropriate.

The Board went on to review the issues as analysed by the staff together with the proposals of how to approach each major issue. The Board concurred that the staff analysis was complete. There was some discussion of particular topic areas as the Board and the staff clarified the intended course of action.

The Board considered a detailed timetable setting out the topics to be addressed at future meetings. The staff explained that redeliberations were expected to take approximately one year. After discussing the order that issues will be brought to the Board, the staff of both the IASB and FASB agreed to examine the timetable to take into account the suggestions put forward.

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