Norwalk, CT, May 30, 2013—The Financial Accounting Standards
Board (FASB) today released its response
to the Post-Implementation Review (PIR) of its business combinations reporting
standard.
The review, conducted by the FASB´s parent organization, the
Financial Accounting Foundation (FAF), examined FASB
Statement No. 141 (revised 2007), Business Combinations (Statement
141(R)) (codified in Accounting Standards Codification Topic 805, Business
Combinations). The standard requires an acquiring organization to recognize the
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquired organization at the acquisition date, measured at their fair values as
of that date, with limited exceptions. Statement 141(R) is largely converged
with IFRS 3 (revised 2007), Business Combinations. The International
Accounting Standards Board (IASB) has initiated a review of IFRS 3.
In
its response, the FASB acknowledged the PIR findings that some participants
expressed difficulty in (1) applying the definition of a business, (2)
accounting for purchased loans, and (3) separately reporting some intangibles
and goodwill. The Board said it will consider the PIR report´s findings in
relation to other projects that are currently underway.
The FASB also
acknowledged the PIR findings related to the cost and complexity of applying the
fair value measurement guidance in FASB Statement No. 157, Fair Value
Measurements, to certain types of assets and liabilities acquired in a
business combination. The FASB said it would review the findings of the
forthcoming PIR on Statement 157, and will coordinate with the IASB once the
review of IFRS 3 is complete , before deciding whether to undertake any
standard-setting action. The FASB will report back to the FAF´s Oversight
Committee and the Board of Trustees as progress is made.
The FASB´s full
response to the Statement 141(R) PIR report is available on the FASB website. More information on the FAF´s PIR
process can be found on the FAF
website.