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IFRS 3 and IFRS 11 — Previously Held Interests

Date recorded:

Previously Held Interests — Agenda Paper 9


In June 2016 the IASB issued an exposure draft proposing amendments to IFRS 3 Business Combinations and IFRS 11 Joint Operations in relation to the Definition of a Business and Accounting for Previously Held Interests. The amendments were placed together for convenience, but are being considered separately by the IASB. The proposals in relation to previously held interests came through the Interpretations Committee and the comment letter feedback is being assessed by the Committee before it is considered by the IASB.

The proposals clarify that when an entity gets:

  • control of a business that is a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring at fair value previously held interests in the assets and liabilities relating to the joint operation.
  • joint control of a business that is a joint operation, it does not remeasure previously held interests in the assets and liabilities relating to the joint operation.

Staff analysis

The IASB received comments from 67 respondents. Most of the comment letter supported he proposals. The main concerns expressed were:

  • a preference by some respondents that the IASB undertake a more fundamental review of how entities should account for changes in interests, or at least wait until the post-implementation review of IFRS 11 has been undertaken;
  • whether the two amendments (see (a) and (b) above) are consistent; and
  • whether “previously held interests” is clear.

Staff recommendation 

The Staff recommendation was that the Committee recommend that the IASB finalise the proposed amendments without alteration.


The IC approved the Staff’s recommendation, except for the clarification of what constitutes ‘previously held interest’ – is it the entity’s overall interests in the joint operation (including goodwill and unrecognised intangible assets), or only the entity’s previously recognised share of individual assets and liabilities in the joint operation? The Staff agreed to conduct further research and will report back to the IC.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.