IFRS 3 ‘Business Combinations’ sets out the accounting requirements for these transactions, which can be challenging to apply in practice. The Standard itself has been in place for more than ten years now and has undergone a post implementation review by the International Accounting Standards Board (IASB). It is one of the most referred to Standards currently on issue.
Our ‘Insights into IFRS 3’ series summarises the key areas of the Standard, highlighting aspects that are more difficult to interpret and revisiting the most relevant features that could impact your business.
IFRS 3 has specific guidance on how some items are recognised and measured. This guidance is described as a series of exceptions to the general recognition and measurement principles (as discussed in our articles ‘Insights into IFRS 3 – Recognition principle’ and ‘Insights into IFRS 3 – How should the identifiable assets and liabilities be measured?’ respectively).
This article summarises this specific guidance and provides examples to illustrate its application.
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