The Accounting Standards Committee has issued important amendments to the Statement of Recommended Practice (SORP) on Merger Accounting for Common Control Combinations, strengthening the guidance available to Sri Lankan entities engaging in group restructurings and reorganisations.

While the SORP is not mandatory, entities that fall within its scope are strongly encouraged to adopt its recommendations. The updated guidance promotes greater consistency, transparency, and comparability in financial reporting—particularly in situations where common control transactions are not fully addressed by existing SLFRS/LKAS standards.

These amendments clarify how merger accounting should be applied, highlight the interaction with key standards such as LKAS 8, SLFRS 10, and LKAS 37, and reinforce the importance of aligning accounting policies with established principles under Sri Lanka’s financial reporting framework.

you can find more details checking SoRP for Merger Accounting for Common Control Combinations