On 17 October, EFRAG published its Feedback Statement concerning the IASB’s Exposure Draft on Business Combinations—Disclosures, Goodwill, and Impairment. This document highlights the key responses from various stakeholders to the IASB’s proposals, as well as how EFRAG has incorporated this feedback into its Final Comment Letter.
Key Points of Feedback:
- IFRS 3 (Business Combinations): While most stakeholders supported the IASB’s goal of improving the quality of information related to business combinations, some concerns were raised by preparers, auditors, and national standard setters. These concerns focused on specific aspects of the proposed changes that may present challenges in practice.
- IAS 36 (Impairment of Assets): Many stakeholders felt that the proposed amendments to IAS 36 would not lead to meaningful changes in current practices. In particular, they expressed doubts about whether the changes would effectively address issues such as management over-optimism and the shielding effects during impairment testing.
Timeline of Developments:
- The IASB initially published its Exposure Draft on 14 March 2024.
- EFRAG opened a consultation period and, after gathering feedback from stakeholders, released its Final Comment Letter on 22 July 2024.
This Feedback Statement provides important insights into how European stakeholders view the proposed changes and reflects EFRAG’s continued commitment to refining international accounting standards through collaboration with the IASB.
For more information [here]