This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

EFRAG draft comment letter on the IASB's discussion paper on business combinations under common control

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

09 Feb 2021

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB discussion paper DP/2020/2 'Business Combinations under Common Control'.

The IASB's project on Common control transactions is designed to address accounting for transactions between entities that are ultimately controlled by the same party or parties (so-called 'common control transactions').

In its draft comment letter on the discussion paper published in November 2020, EFRAG

  • supports the proposed scope of the discussion paper but considers that the IASB should better define 'group restructurings' without labelling them Business Combinations under Common Control (BCUCC) when they do not meet the description of a business combination in IFRS 3 Business Combinations;
  • agrees that a single measurement method is not appropriate for all BCUCC and supports the two concepts of acquisition method and book-value method but proposes a few modifications to the IASB’s decision tree on when to apply each method;
  • generally agrees with the IASB's proposals on how to apply the two methods but is consulting constituents on certain aspects of both methods;
  • supports the proposed disclosure requirements for BCUCC accounted for under both the acquisition method and a book-value method.

Comments on EFRAG's draft comment letter are requested by 30 July 2021. For more information, see the press release and the draft comment letter on the EFRAG's website.

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.