On 14 March 2024, the International Accounting Standards Board (IASB) has published a package of proposals aimed at enhancing the information companies provide to investors about acquisitions.
Additionally, IASB launched its public consultation on the Exposure Draft Business Combinations—Disclosures, Goodwill and Impairment.
The deadline for commenting on the Exposure Draft is 15 July 2024.
The proposals in the Exposure Draft, respond to stakeholder feedback that reporting on acquisitions poses difficulties for both investors and companies. Stakeholders have also expressed concern about the effectiveness and complexity of the impairment test for operations which have been allocated goodwill.
In response to these concerns, the IASB has published an Exposure Draft, proposing 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. However, companies would not be required to disclose information that could compromise their acquisition objectives.
Furthermore, the IASB proposes related amendments to IAS 36 Impairment of Assets to enhance the impairment test for operations allocated goodwill.