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Acquisitions of businesses can take many forms and can have a fundamental impact of the acquirer’s operations, resources and strategies. These acquisitions are known as mergers or business combinations which should be accounted for using the requirements in IFRS 3 ‘Business Combinations’.

Mergers and acquisitions are becoming more and more common as entities aim to achieve their growth objectives. IFRS 3 ‘Business Combinations’ contains the requirements for these transactions, which are challenging in practice.

Business combinations are infrequent transactions that are unique for each occurrence. IFRS 3 ‘Business Combinations’ contains the requirements and despite being fairly stable in the ten years since its been released, still provides challenges when accounting for these transactions in practice.

The Foundation has acknowledged the need for global sustainability reporting standards and the role it could play in their development. The International Organisation of Securities Commissions (IOSCO) in late February 2021 said there was an urgent need for globally consistent, comparable, and reliable sustainability disclosure standards and it announced its priorities and vision for a Sustainability Standards Board (SSB) which closely align with those set out by the Foundation.

The International Accounting Standards Board (IASB) has now published an Exposure Draft ‘ Regulatory Assets and Regulatory Liabilities ’ (the ED). The ED proposes to replace IFRS 14 ‘Regulatory Deferral Accounts’ and require entities subject to rate regulation to give investors better information about their financial performance.

Mergers and acquisitions (business combinations) can have a fundamental impact on the acquirer’s operations, resources and strategies. For most entities such transactions are infrequent, and each is unique. IFRS 3 ‘Business Combinations’ contains the requirements for these transactions, which are challenging in practice. The Standard itself has been in place for more than ten years now and has undergone a post implementation review by the IASB. It is one of the most referred to Standards currently issued.

This publication is designed to give preparers of IFRS financial statements a high-level awareness of recent changes to International Financial Reporting Standards. It covers both new Standards and Interpretations that have been issued and amendments made to existing ones.

IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ requires the financial statements of any entity whose functional currency is the currency of a hyperinflationary economy to be for changes in the general purchasing power of that currency so that the financial information provided is more meaningful.

Granting lease incentives is a common way to encourage a new lessee to sign up to a new lease contract and fill vacant premises. When accounting for lease incentives in accordance with IFRS 16 ‘Leases’ from a lessee perspective, questions may arise in how to identify a lease incentive and when the accounting treatment changes depending on how the lease incentive is granted.

Navigating the changes to International Financial Reporting Standards.

IFRS news is your quarterly update on things relating to International Financial Reporting Standards (IFRS). We’ll bring you up to speed on topical issues and significant developments, provide comments and give our point of view.

Read our latest IFRS update: IFRS Example Interim Consolidated Financial Statements 2020

In October 2018, the IASB issued ‘Definition of a Business’ making amendments to IFRS 3 ‘Business Combinations’. The amendments are a response to feedback received from the post-implementation review of IFRS 3 (‘the Standard’).

Read our Insights into IFRS 16 publication

Read our latest IFRS article: Applying IFRS 15’s ‘no alternative use’ to real estate sales

IFRS 16 makes significant changes to sale and leaseback accounting. A sale and leaseback transaction is one where an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) for consideration and leases that asset back from the buyer-lessor.