BC401 Because a business combination often results in a significant change to an entity’s operations, the nature and extent of the information disclosed about the transaction bear on users’ abilities to assess the effects of such changes on post‑combination profit or loss and cash flows. Accordingly, as part of their respective projects that led to IFRS 3 and SFAS 141, the IASB and the FASB both considered the usefulness of the disclosure requirements required by IAS 22 and APB Opinion 16, respectively, for the acquisition method. IFRS 3 and SFAS 141 carried forward disclosures from the earlier requirements for business combinations that remained relevant, eliminated those that did not and modified those that were affected by changes in the recognition or measurement requirements. In the second phase of their projects on business combinations, the boards undertook essentially the same sort of reconsideration of the disclosure requirements in IFRS 3 and SFAS 141, and they also considered particular disclosures requested by respondents to the 2005 Exposure Draft.

BC402 The remainder of this section first reviews the changes that SFAS 141 and IFRS 3 made to the disclosure requirements of APB Opinion 16 and IAS 22 respectively (paragraphs BC403-BC418). Paragraphs BC419-BC428 then discuss the changes the revised standards make to the disclosure requirements of SFAS 141 and IFRS 3.