BC64 During its deliberations leading to SFAS 141, the FASB concluded that combinations involving only mutual entities should also be accounted for using the acquisition method but decided not to mandate its use until the FASB had considered implementation questions raised about the application of that method. Similarly, IFRS 3 did not require use of the acquisition method for combinations of mutual entities, although the IASB had also concluded that the acquisition method was appropriate for those combinations. Instead, as part of the first phase of its business combinations project, the IASB published an exposure draft of proposed amendments to IFRS 3 - Combinations by Contract Alone or Involving Mutual Entities, which proposed an interim approach for accounting for those combinations until the IASB had considered related implementation issues in the second phase of its project. In the light of respondents’ comments, the IASB decided not to proceed with the proposals in the exposure draft, primarily for reasons of timing and impending consideration of those issues in the second phase of this project.

BC65 After SFAS 141 was issued, the FASB began a joint project with the Canadian Accounting Standards Board (AcSB). The objective of that project was to develop guidance for combinations of two or more mutual entities. In October 2001 the FASB and the AcSB held a round‑table discussion with representatives of mutual banks, credit unions, co‑operatives and other mutual entities. In January 2004 the FASB met representatives of organisations of co‑operative and other mutual entities to discuss its tentative conclusions and specific concerns raised by constituents. In addition, the FASB conducted field visits to three mutual entities in 2004.