The recently issued Exposure Draft (ED) of PSAK 338 (Revised 2025) sets out proposals to clarify the accounting for business combination under common control (BCUCC). The ED addresses a number of application issues and diversity in practice identified from the post-implementation review (PIR) of PSAK 338, whilst retaining existing requirements to measure BCUCC at book value under the pooling of interest method. The ED is open for comments up to 15 October 2025.
The ED, among others, proposed requirements for the receiving entity a) to measure assets and liabilities of transferred entity at the carrying amounts based on the controlling/transferring entity’s book values, subject to “impracticability relief” and b) not to present pre-combination information, in circumstances where it is “impracticable”, after making every reasonable effort to do so.
The ED is proposed to be applied prospectively, from annual periods beginning on or after 1 January 2026, and early adoption is permitted. Companies currently facing application challenges addressed by this ED may benefit from early adoption, provided that the ED is eventually finalized in its current form.
Read our observations of the key changes introduced by the ED, including on significant judgments that companies will have to exercise in evaluating the “impracticability relief”.
