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Recently, the International Accounting Standards Board (IASB) issued certain proposals aimed at enhancing the information companies provide to investors about acquisitions. The proposals respond to stakeholder feedback that reporting on acquisitions poses difficulties for both investors and companies:

  • Investors lack sufficient and timely information about the acquisitions and post-acquisition performance
  • Companies seek to provide useful information to investors but see risks and costs in providing some information, particularly commercially sensitive information that could be used by the competitors.

Accordingly, the IASB has proposed amendments to IFRS 3, Business Combinations. The proposed amendments would require companies to report the objectives and related performance targets of their most important acquisitions, including whether these are met in subsequent years. Companies would also be required to provide information about the expected synergies for all material acquisitions.

Further, the IASB has also proposed related amendments to IAS 36, Impairment of Assets to make targeted improvements to the impairment test.

The comment period is open up to 15 July 2024.

To access the text of the exposure draft, please click here

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