Remaining differences in other IFRSs and US GAAP
We were not able to eliminate all differences between the existing IFRS 3 and IAS 27 and their US GAAP equivalents.
We reached decisions different from those reached by the FASB in relation to two matters:
- the measurement of non-controlling interests
- three disclosure items.
The revised IFRS 3 permits an acquirer to measure the non-controlling interests in an acquiree either at fair value or at its proportionate share of the acquiree�s identifiable net assets whereas SFAS 141(R) requires the non-controlling interests in an acquiree to be measured at fair value.
Legacy differences in other IFRSs and US GAAP
Other differences remain because of the boards� decision to provide guidance for accounting for business combinations that is consistent with other IFRSs or FASB standards. Many of those differences are being considered in current projects or are candidates for future convergence projects, which is why the boards allowed those differences to continue at this time.
The boards have different definitions of control, because of differences between our consolidations standards. As a consequence it is possible that a transaction that is a business combination in accordance with the revised IFRS 3 might not be a business combination in accordance with SFAS 141(R). We have a separate project to replace IAS 27 and expect to publish a discussion paper in 2008.
The revised IFRS 3 carries forward the definition of fair value from the existing version, which is based on an exchange value. US GAAP defines fair value as an exit value. We have a separate project in which we are considering the definition of fair value and related measurement guidance.
The boards have very similar requirements for recognising and measuring assets and liabilities arising from contingencies, both initially and after the acquisition. However, differences between the criteria for initial recognition (IFRS 3 has a �reliable measurement� threshold whereas SFAS 141(R) has a �more likely than not� threshold for non-contractual liabilities) might to lead to some differences in application. We have an ongoing project to amend IAS 37.