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- 2023 Issued Standard – IFRS 3
The 2023 Issued Standards include all amendments issued up to and including 1 January 2023.
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Summary
Business combinations are accounted for using the acquisition method.
Goodwill is measured as the excess of the aggregate of:
- consideration transferred;
- the non-controlling (minority) interest; and
- fair value of any previously held equity interest in acquiree, over the identifiable net assets of the acquiree.
The non-controlling (minority) interest is measured at acquisition either at fair value or as a proportion of the fair value of the net assets of the acquiree.
Featured factsheet
‘IFRS 3 Business Combinations’ explains how to determine whether a transaction is within the scope of IFRS 3 and provides an overview of the acquisition method. It also provides a summary of the standard’s disclosure requirements.
Recent amendments
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Current proposals
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ED/2024/1 Business Combinations – Disclosures, Goodwill and Impairment
The IASB’s Exposure Draft Business Combinations – Disclosures, Goodwill and Impairment proposes amendments to IFRS 3 and IAS 36 to:
- improve the information companies disclose about the performance of business combinations; and
- improve the requirements around the impairment test of cash-generating units containing goodwill.
Updates and supporting material are available on the Business Combinations—Disclosures, Goodwill and Impairment project page.
Related IFRIC interpretations
UK reduced disclosures – FRS 101
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.
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ICAEW factsheets and guides
The Corporate Reporting Faculty's annual IFRS factsheets provide a more detailed discussion of recent IFRS amendments.
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