Responses to IASB Documents for Comment

IFRS 3 Business Combinations

Exposure Draft – Definition of a Business and Accounting for Previously Held Interests (Proposed amendments to IFRS 3 and IFRS 11) – June 2016

On October 31, 2016, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in June 2016. Overall, the letter agrees with the narrow-scope amendments to IFRS 3 Business Combinations and IFRS 11 Joint Arrangements. The letter commends both the IASB and the FASB for taking action to support the interpretation of the standards on business combinations (i.e., IFRS 3 and Proposed Accounting Standards Update No.2015-330 Business Combinations (Topic 805)) that will result in a more consistent application globally. The letter encourages both Boards to seek high-quality solutions that will result in more comparable financial reporting outcomes in the U.S. and globally. Accordingly, the letter provides some recommendations to help achieve this goal. Although the letter agrees with the proposed amendments to IFRS 11, it also expresses concern over addressing the remeasurement of previously held interests for changing ownership interests on a transaction-by-transaction basis, rather than holistically. Read the AcSB letter posted by the IASB.

Request for Information – Post-implementation Review: IFRS 3 Business Combinations – January 2014

On May 30, 2014, the AcSB submitted a comment letter responding to the IASB’s Request for Information issued in January 2014. The letter strongly supports post-implementation reviews and generally views IFRS 3 as a workable standard. However, the letter points out some aspects of IFRS 3 that are challenging from an application perspective. The letter notes that the single biggest challenge is in the determination of what constitutes a business and, therefore, whether a transaction is a business combination or an asset acquisition. Read the AcSB letter posted by the IASB.