Access to timely, relevant information about acquisitions is vital for investors, but disclosures do not always provide sufficient information to understand post-acquisition performance. This is a crucial issue given the number of business acquisitions each year and the trillions of dollars of goodwill involved globally.
Improved financial information would also help investors to hold management to account more effectively on their decisions to acquire businesses.
Stakeholders can submit comment letters to the IASB by 31 December 2020 giving their views on these topics. The IASB will then consider the comments received before deciding whether to advance to the exposure draft stage of the project.
The EY publication Applying IFRS – Business combinations: disclosures, goodwill and impairment summarizes the proposals in the discussion paper to improve disclosures for the subsequent performance of a business combination, to retain the impairment-only approach for goodwill, and to simplify the impairment test.
How EY can help
Transaction accounting, IPO and capital markets
EY teams can help with many aspects of accounting and reporting for M&A, public offerings and other capital markets transactions.
Read moreSummary
Investors are looking for better information about how acquisitions are performing to help them hold company management to account. Currently, investors suggest that disclosures do not provide sufficient information to understand post-acquisition performance. In response, the International Accounting Standards Board is seeking views on potential changes to accounting standards regarding business acquisitions. A new EY publication examines this issue and summarizes the IASB proposals.