IASB revises rules on takeovers
In a move that demonstrates unprecedented speed, the body that sets international accounting standards has issued revised rules on takeovers less than a month after issuing the original.
Link: IAS special report
The decision by the International Accounting Standards Board to produce another exposure draft on IFRS3 Business Combinations, was made while the standard was being finalised for release.
The board found that it had failed to deal with combinations involving mutual entities or those brought together by contract alone.
While the issue was too important not to issue for public comment, the board judged that so few transactions would be affected by the amendments that it decided to go ahead with the release of the standard for its 31 March deadline.
However, with consultation on the exposure draft not closing until 31 July, and the European Commission’s reluctance to endorse a standard before it is fully completed, it will once again be a race against time to have the standard legally adopted before 2005.
‘It is going to go down to the wire,’ said Nigel Sleigh Johnson, head of financial reporting at the ICAEW. ‘But a lot of the work can be done by the EC beforehand in anticipation of receiving the final standard, in order to be ready for 2005. It just has to be made clear to companies that endorsement is likely to go ahead and that they shouldn?t wait for endorsement to make preparations.’