Question

Research the most recent IASB Board Meeting Summaries, discuss any one topic that you reviewed.

• What do you think the impact of this particular topic might be on domestic companies if the United States ultimately adopts IFRS?

Answer 1

Business Combinations under Common Control :-

1. to require the receiving entity to recognise any excess fair value of the acquired identifiable net assets over the fair value of the consideration transferred as an increase in the receiving entity’s equity (contribution), and not as a gain on a bargain purchase in the statement of profit or loss. Eleven of 14 Board members agreed and three disagreed with this decision.
2. not to require the receiving entity to identify, measure and recognise a distribution.

Impact on the Domestic Companies if the United States ultimately adopts IFRS :-

1. Renewed Clarity.
2. Possible Simplification.
3. Cheaper Implementation.
4. Strong Capital Market Orientation.
5. Easy to Implement.
6. IFRS will showcase the strength of the American Economy.
7. IFRS will promote will promote uniformity & Transparency in the Global Reporting.
8. Comparability between different countries on accounting and financial reporting.
9. This will result in an increase in capital flow and international investments, which will further reduce interest rates and lead to economic growth for a specific nation and the firms with which the country conducts business.
10. Corporate management will benefit from simpler, streamlined standards, rules and practices that apply to all countries and are followed worldwide. The change will afford corporate management the opportunity to raise capital via lower interest rates while lowering risk and the cost of doing business.