Farley And Partners

Business Combinations

Offers a step-by-step guide to the accounting of a business combination, including the definition of control. This module also explores the accounting of an associate and a joint venture in contrast with a subsidiary.

IFRS 10: Consolidated Financial Statements

  • Definition of control, including the definition of power and the distinction between substantive and protective rights and also de facto control
  • Definition of a subsidiary and when this must be consolidated
  • Date of acquisition
  • Consolidation procedures
  • Intercompany balances and transactions
  • Non-controlling interest

IFRS 3: Business Combinations

  • Definition of a business combination
  • Goodwill calculation, including consideration transferred, the net assets acquired and impairment testing
  • Gain on acquisition
  • Initial accounting determined provisionally
  • The two methods of accounting for non-controlling interest

IAS 27: Separate Financial Statements

  • Accounting policy choices for the investments in subsidiaries, associates and joint ventures in the separate financial statements of the
  • parent or investor.

IAS 28: Investments in Associates and Joint Ventures

  • Definition of an associate
  • Equity method
  • Impairment testing

IFRS 11: Joint Arrangements

  • Definition of joint arrangements and determining the type of joint arrangement
  • Joint control
  • Accounting for a joint operation
  • Accounting for a joint venture

IFRS 12: Disclosure of Interests in Other Entities

  • Significant judgement and assumptions
  • Interest in subsidiaries
  • Interest in associates and joint arrangements
  • Interests in unconsolidated structured entities
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