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IASB proposes to amend IFRS 3 'Business Combinations'

  • IASB Exposure Draft (original) Image

29 Apr 2004

The IASB has issued an exposure draft: 'Proposed Amendments to IFRS 3 Business Combinations: Combinations by Contract Alone or Involving Mutual Entities'.

The amendments would add to the scope of IFRS 3:
  • Combinations in which separate entities are brought together to form a reporting entity by contract alone without the obtaining of an ownership interest; and
  • Business combinations involving mutual entities.

Both were excluded from IFRS 3 when it was issued last month. Including these transactions in IFRS 3 would mean that an acquirer must be identified and the acquirer must account for the combination using the purchase method.

The exposure draft would not change the IFRS 3 scope exclusion for combinations involving entities under common control.

If finalised, the proposal would be applied to business combinations agreed to on or after 31 March 2004 (same as IFRS 3).

The IASB has asked for comments by 31 July 2004. Click for IASB Press Release (PDF 33k).


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