IFRS 3 — Earlier application of revised IFRS 3

Date recorded:

The transition requirement in paragraph 64 of IFRS 3 Business Combinations (2008) permits an entity to apply the revised standard before 1 July 2009. However, it restricts early application as follows: 'this IFRS shall be applied only at the beginning of an annual reporting period that begins on or after 30 June 2007'. Some constituents asked the IFRIC to clarify:

  1. whether IFRS 3 (2008) can be applied early only from the beginning of an annual period or from any time during the annual period; and
  2. if the revised standard can be adopted early at any time during the annual period, whether an entity must restate prior business combinations that occurred in the same annual period.

The staff recommended that the IFRIC not add this issue to its agenda. The staff believe that the wording in IFRS 3.64 clearly requires application of the revised standard for the whole annual period if it is applied early. Therefore, the staff do not expect divergence in practice.

The IFRIC agreed with the staff analysis, but suggested that the wording of the proposed agenda decision be clarified.

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