The Board decided to add to its active agenda a project on common control transactions. Business combinations involving entities or businesses under common control are excluded from the scope of IFRS 3 Business Combinations. As a consequence, practice diverges on the accounting for those transactions in the acquirer�s consolidated and separate financial statements.
The project on common control transactions will examine the definition of a business combination involving entities or businesses under common control and the methods of accounting for those transactions in the acquirer�s consolidated and separate financial statements. The Board observed that similar issues arise with respect to the accounting for demergers, such as the spin-off of a subsidiary or business. Therefore, the Board decided to include demergers in the scope of the project.