IFRS 3 — Contingent consideration and first-time adoption

Date recorded:

The IFRIC discussed potential amendment of IFRS 3 Business Combinations to clarify accounting treatment for contingent consideration from a business combination that occurred before the effective date of IFRS 3(2008) for first time adopters.

Without much discussion the IFRIC agreed not to provide any additional relief to the first-time adopters in this respect as that would go against the principles of IFRS 3(2008). The IFRIC agreed that the current accounting treatment (any outstanding contingent consideration balance at transition date is a financial asset or liability recognised at fair value with corresponding adjustment to opening retained earnings) does not require use of hindsight. Therefore the IFRIC decided not to proceed with this issue in the Annual Improvements process.

Correction list for hyphenation

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