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IASB Developments 
The IASB have a common control transactions project, to deal with the accounting of business combinations for entities under common control. A project outline is expected in January 2009.

• Increased scope to cover business combinations involving only mutual entities and business combinations achieved by contract alone.
 

• The definitions of a business and a business combination were amended and additional guidance was added for identifying when a group of assets constitutes a business.
 

• For each business combination, a choice is available to the acquirer to measure any non-controlling interest in the acquiree either at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
 

• Clarification of the requirements for how the acquirer makes any classifications, designations or assessments for the identifiable assets acquired and liabilities assumed in a business combination.
 

• The period during which changes to deferred tax benefits acquired in a business combination can be adjusted against goodwill has been limited to the measurement period (through a consequential amendment to AASB 112).
 

• An acquirer is no longer permitted to recognise contingencies acquired in a business combination that do not meet the definition of a liability.
 

• Transaction costs must be expensed (rather than capitalised).
 

• Consideration transferred by the acquirer, including contingent consideration, must be measured and recognised at fair value at the acquisition date. Subsequent changes in the fair value of contingent consideration classified as liabilities are recognised in accordance with AASB 139 Financial Instruments: Recognition and Measurement, AASB 137 Provisions, Contingent Liabilities and Contingent Assets or other Australian Accounting Standards, as appropriate (rather than by adjusting goodwill).
 

• Application guidance was added in relation to when the acquirer is obliged to replace the acquiree’s share-based payment awards; measuring indemnification assets; rights sold previously that are reacquired in a business combination; operating leases; pre-existing relationships and valuation allowances related to financial assets such as receivables and loans.
 

• For business combinations achieved in stages, having the acquisition date as the single measurement date was extended to include the measurement of goodwill. An acquirer must remeasure any equity interest it holds in the acquiree immediately before achieving control at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss.
 

• Restructures of local governments are no longer included in AASB 3.
 

• The application of revised AASB 3 and amended AASB 127 will supersede Interpretation 1001 Consolidated Financial Reports in relation to Pre-Date-of-Transition Dual Listed Company Arrangements, Interpretation 1002 Post-Date-of-Transition Stapling Arrangements and Interpretation 1013 Consolidated Financial Reports in relation to Pre-Date-of-Transition Stapling Arrangements.

• March 2008: AASB 3 (revised) was issued and replaces AASB 3 issued July 2004.