IFRS 3 Business Combinations Phase II
- Published in the Official Journal
- Isabel Batista
In phase II of the project the Board is considering those aspects of business combinations not reviewed in phase I, implementation issues arising from the application of IFRS 3 and how to eliminate differences in the application of the acquisition method between IFRSs and US GAAP. This phase of the project is being conducted jointly with the FASB, with the objective of developing a single high-quality standard of accounting for business combinations that can be used for both domestic and cross-border financial reporting. The goal is to develop a standard that includes a common set of principles and related guidance that produces decision-useful information and minimises exceptions to those principles. The standard is expected to improve the completeness, relevance, and comparability of financial information about business combinations.
In June 2005 the IASB published a joint exposure draft with the FASB to replace the existing IFRS 3 and to amend IAS 27.
In January 2008 the IASB completed the second phase of the Business Combinations project by publishing a revised version of IFRS 3 Business Combinations and an amended version of IAS 27 Consolidated and Separate Financial Statements, also referred to as the new standards.
The new standards come into effect on 1 July 2009, although earlier adoption is permitted.
EFRAG has issued its endorsement advice and the revised standard has now been published in the Official Journal.