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The International Accounting Standards Board (IASB) has published a project summary for its project on Business Combinations under Common Control (BCUCC).
IFRS 3 Business Combinations sets out reporting requirements for acquisitions—referred to as business combinations in IFRS Accounting Standards. However, that Standard does not specify how to report transactions that involve transfers of businesses between companies under common control (for example, companies in the same group).
The Discussion Paper published in 2020 set out the IASB’s preliminary views on how to fill this reporting gap, with the aim of reducing diversity in practice and improving transparency and comparability in reporting these transactions.
The project summary published explains the reasons behind the IASB’s decision in November 2023 not to develop requirements for reporting BCUCCs.
The IASB acknowledged diversity in reporting on BCUCCs would continue, and observed that investors said that they can work with this diversity. The information needed by investors varied among jurisdictions, making it difficult to develop requirements that would meet the information needs of users globally.
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