IFRS 3 summary and timeline
A summary of IFRS 3 Business Combinations, including information on current proposals and a timeline of past amendments, announcements, exposure drafts and consultations.
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- 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.
- As a result of the post-implementation review of IFRS 3 the IASB has initiated a project to consider whether amendments should be made to IFRS 3 and IAS 36 to:
- improve disclosures about acquired businesses, and
- simplify accounting for goodwill
- improve aspects of the impairment test for goodwill.
A discussion paper was published in March 2020 and feedback is expected to be published in March 2021.
- IFRS 3 does not provide guidance on the applicable accounting treatment where entities in a business combination are controlled by the same party. A project is underway to explore how companies should account for such transactions.
A discussion paper was issued in November 2020 and feedback is expected to be published in the second half of 2021.
|19 May 2020||IASB issues Reference to the Conceptual Framework - amendments to IFRS 3
Effective for annual periods beginning on or after 1 January 2022.
|19 March 2020||IASB issues discussion paper on Business Combinations – Disclosures, Goodwill and Impairment|
|30 May 2019
||IASB proposes amendments to IFRS 3 in ED/2019/3 Reference to the Conceptual Framework – proposed amendments to IFRS 3
|22 October 2018||IASB issues Definition of Business amendments to IFRS 3
Effective for business combinations for which the acquisition date is on or after the beginning of the first annual period beginning on or after 1 January 2020 and to asset acquisitions that begin on or after the beginning of that period. Narrow scope amendments help companies determine whether an acquisition made is of a business or a group of assets.
|12 December 2017||IASB issues Annual Improvements to IFRS Standards 2015 – 2017
Effective for annual periods beginning on or after 1 January 2019.
|12 December 2013||IASB issues Annual Improvements to IFRSs 2010–2012 and 2011–2013 Cycles, both of which amend IFRS 3
Annual Improvements to IFRSs 2010-2012 amendment effective for business combinations on or after 1 July 2014; Annual Improvements to IFRSs 2011-2013 amendment effective for annual periods beginning on or after 1 July 2014.
|6 May 2010||IASB issues Annual Improvements to IFRSs 2010 (Amendments to IFRS 3)
Effective for annual periods beginning on or after 1 July 2010.
|10 January 2008||IASB issues IFRS 3 (2008), a revised version of the standard
Effective for business combinations on or after the beginning of the first annual period beginning on or after 1 July 2009.
|31 March 2004||IASB issues IFRS 3
Effective for business combinations on or after 31 March 2004.