PBE Combinations standard

Published 12 July 2019

On 4 July 2019 the External Reporting Board (XRB) issued the new financial reporting standard PBE IPSAS 40 PBE Combinations for application by Tier 1 and Tier 2 registered charities (that is, charities with annual operating expenditure over $2 million).

The purpose of the standard is to provide guidance on accounting for situations where two or more entities are combining into a single entity and/or where one entity is taking control of another.

In particular the standard explains how to:

· identify whether the combination is an amalgamation or an acquisition;

· account for an amalgamation; and

· account for an acquisition.

The full standard can be found on the XRB website here(external link).

Registered charities must apply this standard for all accounting periods beginning on or after 1 January 2021. However, registered charities may begin using the standard before that date if they wish.

If you would like to get in touch with the XRB, you can do so here(external link).