Print this article | Return to Article | Return to CFO.com
Accounting for business combinations mirrors rules set by FASB.
Stephen Taub, CFO.com | US
December 6, 2002
The International Accounting Standards Board (IASB) proposed new rules regarding mergers, some of which have already been adopted by the Financial Accounting Standards Board (FASB).
The IASB had announced in July 2001 that it would undertake a project on mergers as part of its initial agenda, with the goal to improve the quality of, and seek international convergence on, the accounting for business combinations.
"Accounting for business combinations diverges substantially across jurisdictions," said Sir David Tweedie, IASB chairman, in a statement. "These proposals mark a significant step toward achieving high quality standards in business combination accounting, and in ultimately achieving international convergence in this area."
The key items of the IASB's proposals:
The IASB said it still has a few matters to address to eliminate remaining differences between international and national standards on business combinations. That list includes issues related to applying the purchase method of accounting. The IASB is currently engaged in a joint project with FASB to harmonize that treatment.
In addition, the IASB indicated it is looking at accounting for formations of joint ventures and business combinations involving entities under common control, as well as possible applications for "fresh start" accounting.
To read CFO.com's special report, "Goodwill Games II: Reports from the Field," click here.