Global Standards for the world economy

Tuesday 23 July 2019

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International Accounting Standards Board proposes narrow-scope amendments to IFRS 3 and IFRS 11

 28 June 2016


The International Accounting Standards Board (the Board) today published for public consultation 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 a company should 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.

The proposed amendment to accounting for previously held interests was developed through the IFRS Interpretations Committee.

Further information about the Exposure Draft—Definition of a Business and Accounting for Previously Held Interests (Proposed Amendments to IFRS 3 and IFRS 11)—can be accessed here. The deadline for comments is 31 October 2016.