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Definition of a business: Amendments to AASB 3 Business Combinations

Definition of a business: Amendments to AASB 3

The long-awaited amendments to AASB 3 for the definition of a business will result in fewer business combinations being identified and will help achieve greater alignment to US Generally Accepted Accounting Principles (USGAAP).

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Key insights

  • The new business definition is narrower.
  • There is a new optional asset concentration test.
  • New considerations have been incorporated to help identify when an acquired process is substantive.
  • The amendments result in closer alignment to USGAAP.

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