Global Standards for the world economy

Saturday 27 May 2017

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Meeting Summaries and Observer Notes

 IASB March 2007


Loss of control of a business resulting from a distribution to owners

The Board discussed the accounting for when an entity transfers its shares in a subsidiary to its own shareholders with the result that the entity loses controls of the subsidiary (commonly referred to as a spin-off). The IFRIC had previously discussed this matter, but decided not to take it onto its agenda while the Business Combinations project was in progress.

The Board decided not to address in phase II of the Business Combinations project the measurement basis of distributions to owners. That said, the Board tentatively decided that the revised business combinations standard should clarify that an entity should measure any retained interest in the previously controlled subsidiary at fair value at the date control is lost.

Date: 3/21/2007