'The Boards' have begun finalizing FAS141R and IFRS 3

BVWireIssue #57-2
June 13, 2007

After meeting three times to discuss their joint project on Business Combinations (Applying the Acquisition Method), both the FASB and IASB (the Boards) have decided that no new issues or concerns would cause either to re-expose FAS 141R or IFRS 3 and related statements (the Statements).  According to the latest project update, “all of the changes made during redeliberations were in response to comments from respondents and will make the Statements easier for preparers to implement.” 

Accordingly, both Boards have instructed their staffs "to begin the drafting and pre-balloting process for the final business combinations and noncontrolling interests Statements,” which will most likely appear this August.  FAS 141R will be effective for annual periods beginning on or after December 15, 2008, while IFRSs 3 will be effective for annual reporting periods beginning on or after 1 January 2009 (effectively the same date).

One possible change: While the FASB currently prohibits an entity from adopting the Statements before their effective dates, the IASB decided to permit early application (with appropriate disclosure).  But “my guess is that FASB will change and allow early adoption,” says Al King, in his most recent BVR telephone conference, “Playing and Prospering by the New Valuation Rules” (available here).  The FASB is holding an open meeting today, June 13, 2007, at 9 a.m. EDT to “reconsider certain of [its] decisions.”  For more information, click here.

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