BC1 This Basis for Conclusions summarises the considerations of the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) in reaching the conclusions in their revised standards, IFRS 3 Business Combinations (as revised in 2008) and FASB Statement No. 141 (revised 2007) Business Combinations (SFAS 141(R)). It includes the reasons why each board accepted particular approaches and rejected others. Individual board members gave greater weight to some factors than to others.

BC2 The revised IFRS 3 and SFAS 141(R) carry forward without reconsideration the primary conclusions each board reached in IFRS 3 (issued in 2004) and FASB Statement No. 141 (SFAS 141, issued in 2001), both of which were titled Business Combinations. The conclusions carried forward include, among others, the requirement to apply the purchase method (which the revised standards refer to as the acquisition method) to account for all business combinations and the identifiability criteria for recognising an intangible asset separately from goodwill. This Basis for Conclusions includes the reasons for those conclusions, as well as the reasons for the conclusions the boards reached in their joint deliberations that led to the revised standards. Because the provisions of the revised standards on applying the acquisition method represent a more extensive change to SFAS 141 than to the previous version of IFRS 3, this Basis for Conclusions includes more discussion of the FASB’s conclusions than of the IASB’s in the second phase of their respective business combinations projects.