BDO submits comment letter to the IASB on Exposure Draft 2024/01 Business Combinations – Disclosures
BDO submits comment letter to the IASB on Exposure Draft 2024/01 Business Combinations – Disclosures
BDO has submitted a comment letter in response to the Exposure Draft issued by the IASB on Business Combinations – Disclosures, Goodwill and Impairment.
While BDO supports the objective of the IASB to improve the usefulness of information provided to users about business combinations and it generally agrees with the proposed improvements and clarifications to how the impairment test is performed, BDO has expressed concerns about certain aspects of the proposals, as below:
While BDO supports the objective of the IASB to improve the usefulness of information provided to users about business combinations and it generally agrees with the proposed improvements and clarifications to how the impairment test is performed, BDO has expressed concerns about certain aspects of the proposals, as below:
- BDO does not support the proposal to require entities to disclose quantitative information about expected synergies, as it believes that this type of disclosure is better suited to strategic reports and management commentary.
- BDO does not agree with the 10 per cent thresholds used to determine which business combinations are considered ‘strategic business combinations’.
- BDO does not agree that operating profit or loss should be a metric used to determine whether a business combination is strategic or not.
- BDO suggests that the revised requirement in IAS 36.80(a) be clarified to ensure that the intention of the requirement is capable of being consistently applied.