We have publicly released our submissions on the trilogy of exposure drafts proposing changes to accounting for business combinations, consolidations and non-financial liabilities. These can be downloaded below. What are some of the more contentious proposals? Some of the more contentious proposals include: Business combinations and consolidation expensing of acquisition-related costs, e.g. legal, accounting, valuation and other consulting fees requiring recognition of 100% of the goodwill related to an entity, even though less than 100% is owned by the controlling shareholder requiring all intangible assets acquired in a business combination to be recognised, i.e. it will no longer be acceptable to argue that they 'cannot be reliably measured' treating changes in ownership levels in a subsidiary as an equity transaction recognising pre-combination and any post-loss-of-control investments in a subsidiary at fair value.
Non-financial liabilities removing the concepts of 'contingent liabilities' and 'contingent assets' requiring a liability to be recognised for all 'unconditional' obligations without reference to the 'probable' recognition criteria treating items previously considered contingent assets as falling within the scope of IAS 38 Intangible Assets.
For information about the revised IFRS 3 and IAS 27 issued by the IASB as a result of these proposals, see Accounting alert 2008/01. |
