Exposure Draft and comment letters—Definition of a Business and Accounting for Previously Held Interests (Amendments to IFRS 3 and IFRS 11)

 

The International Accounting Standards Board (the Board) published for public consultation Definition of a business and accounting for previously held interests (proposed amendments to IFRS 3 Business Combinations and IFRS 11 Joint Arrangements). It clarifies both the definition of a business and how to account for previously held interests.

The proposed amendments provide:

  • clearer application guidance to help distinguish between a business and a group of assets when applying IFRS 3; and
  • clarification on how an entityshould account for previously held interest in a business, if acquiring control, or joint control, of that business.

The proposed amended application guidance on the definition of a business in IFRS 3 arises from the Board’s Post-implementation Review (PIR) process, which is conducted on each Standard and major amendment approximately two years after their effective dates. The IFRS 3 PIR shows general support for the accounting requirements in the Standard but identifies some areas where further research will be undertaken. The full PIR of IFRS 3 is available here. Further information on the definition of a business project can be found here.

The proposed amendment to accounting for previously held interests was developed through the IFRS Interpretations Committee. Further information on this project can be found here.

The Exposure Draft was open for comment until 31 October 2016.

 

Comment letters are public and all comment letters received on the due process document can be accessed below.

If you have trouble finding a specific comment letter, please contact us.

Access individual comment letters in the table below or download all letters as zip file.

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