IFRS 3 — Definition of a business
Background
The post-implementation review of IFRS 3 Business Combinations was completed in 2015 by publishing a report and feedback statement Post-implementation Review of IFRS 3 Business Combinations. The report showed general support for the accounting requirements in the standard but some areas were identified where further action needed to be undertaken, including the definition of a business as it had become obvious that entities have difficulties when determining whether they have acquired a business or a group of assets. As the accounting requirements for goodwill, acquisition costs and deferred tax differ on the acquisition of a business and on the acquisition of a group of assets, the IASB decided in October 2015 to issue narrow scope amendments aimed at resolving the difficulties that arise when an entity is determining whether it has acquired a business or a group of assets.
Current status of the project
Project milestones
Date | Development | Comments |
---|---|---|
February 2015 | Formally added to the IASB agenda | |
28 June 2016 | ED/2016/1 Definition of a Business and Accounting for Previously Held Interests (Proposed amendments to IFRS 3 and IFRS 11) published | comments requested by 31 October 2016 |
22 October 2018 | Definition of a Business (Amendments to IFRS 3) issued | effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020 and to asset acquisitions that occur on or after the beginning of that period |