The Boards (FASB and IASB) have apparently decided, contrary to some conjecture (see the last week’s BVWire) that for any final Business Combinations statement—SFAS 141R and IFRS 3, respectively—the transition and effective dates will be as follows:
1. The Statement should be applied prospectively to business combinations for which the acquisition date is on or after the effective date (12-15-2008 for SFAS 141R and 01-01-2009 for IFRS 3).
2. Retrospective application to acquisitions completed before the Statement is applied* should not be permitted.
3. The Statement should be applied at the same time the final non-controlling interests Statements are applied.
4. The IASB decided to remove the proposed exception to prospective application for contingent liabilities recognized in a business combination for which the acquisition date is before the application date of the new business combinations Statement. The IASB will not require those liabilities to be reassessed.
The Boards still expect to issue the final Statements early in the third quarter of 2007. To read the complete project update, which notes convergences, compromises—as well as where the Boards still may differ (accounting for tax uncertainties, measurement of non-controlling interests and goodwill)—click here. (*Note: The four points above are directly quoted from the FASB project update, but the word “applied” in #2 may be incorrect, and “effective” may be more accurate. —Editor.)
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