IASB proposals for improving information about business combinations

The IASB published its Discussion Paper, Business Combinations—Disclosures, Goodwill and Impairment, ¹ in March 2020. The aim of the paper is to improve the quality of information provided to investors about business acquisitions, so that they can hold management to account for them. Moreover, by better understanding management’s performance in targeting and effectively integrating acquired companies, investors would be able to better assess future plans for expansion. The vexed question of accounting for goodwill forms part of the package of ideas discussed in the paper. This article summarises the Board’s proposals, and EFRAG’s preliminary views on them, which are set out in its recently issued draft comment letter. ²