Business combinations under common control are excluded from the scope of IFRS 3 Business Combinations. As a consequence, the accounting for those transactions diverges in practice. A project on common control transactions would examine the definition of common control and the methods of accounting for business combinations under common control—in the acquirer’s consolidated and separate financial statements. The project would also consider the accounting for demergers, such as the spin-off of a subsidiary or business.

Last IASB meeting update

The project has been paused.

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Next discussion by the IASB

In the light of other priorities, the Board paused the project and directed the staff to consider at a later date whether it should resume its work on common control transactions. The date is yet to be confirmed.