The IASB has recently published amendments to IFRS 11, addressing Accounting for Acquisitions of
Interests in Joint Operations, effective for annual periods
beginning on or after January 1, 2016.
The amendments address apparent inconsistencies in practice in
acquiring for such interests. Up to this point, some issuers have
been accounting for the transactions by applying IFRS 3 to the
extent it's applicable, measuring identifiable assets and
liabilities acquired at their fair values and recognizing any
excess purchase price as goodwill, while expensing transaction
costs as for business combinations. Others followed a "cost
approach" of allocating the total cost of acquiring the
interest in the joint operation, including transaction costs, to
identifiable assets on the basis of relative fair values, without
recognizing goodwill. Others may have followed a hybrid of these
two approaches.
