EFRAG comments on IASB business combinations
Earlier this month, the European Financial Reporting Advisory Group (EFRAG) published its Final Comment Letter on the IASB’s Exposure Draft (ED) ED/2024/1, focusing on Business Combinations—Disclosures, Goodwill, and Impairment. EFRAG supports improving investor information on acquisitions but has reservations about some proposed amendments.
For IFRS 3, EFRAG suggests disclosing performance and synergy information in management reports, allowing entities to challenge the strategic acquisition presumption, and removing ‘operating profit or loss’ from thresholds. They also recommend providing illustrative examples and reviewing management levels involved in monitoring information.
Regarding IAS 36, EFRAG advises modifying guidance on goodwill allocation, defining uncommitted restructuring content, and clarifying pre-tax and post-tax rate usage in recoverable amount calculations.
For detailed insights, read EFRAG’s letter here.
