Insights into IFRS 3: Definition of a Business (Amendments to IFRS 3)

The amendments are a response to feedback received from the post-implementation review of IFRS 3 (‘the Standard’). They clarify the definition of a business, with the aim of helping entities to determine whether a transaction should be accounted for as an asset acquisition or a business combination. 

In summary, the amendments:

• clarify the minimum attributes that the acquired set of activities and assets must have to be considered a business
• remove the assessment of whether market participants are able to replace missing inputs or processes and continue to produce outputs
• narrow the definition of a business and the definition of outputs
• add an optional concentration test that allows a simplified assessment of whether an acquired set of activities and assets is not a business.

Download the Insights into IFRS 3: Definition of a Business (Amendments to IFRS 3)

In October 2018, the IASB issued ‘Definition of a Business’ making amendments to IFRS 3 ‘Business Combinations’.

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