Business Combinations under Common Control: Filling a Gap in IFRS Standards

2021 ◽  
Author(s):  
Ann Tarca
Keyword(s):  
Business Combinations ◽  
Common Control

Dialogue with standard setters. Business Combinations under Common Control: Concerns, Criticisms and Strides

2015 ◽  
pp. 107-126 ◽  
Author(s):  
Raffaele Fiume ◽  
Tiziano Onesti ◽  
Mauro Romano ◽  
Marco Taliento
Keyword(s):  
Capital Market ◽  
Business Combinations ◽  
Common Control ◽  
The World ◽  
Before And After

Although excluded from the scope of IFRS 3, business combinations under common control (BCUCCs) are widespread transactions that take place all over the world in different forms, often as a reorganization or restructuring among related parties. These transactions occur when entities are ultimately - not transiently - controlled by the same party/ies before and after the combination (which is neither a capital market nor an arm's length transaction and devoid of economic substance: indeed, no change of control is entailed). The scarce and fragmentary literature, not to mention the lack of clear consensus on the topic, contributes to the prevailing concerns on how to account for BCUCCs. In this complex context, the purpose of this work is to assess the possible and various accounting methods and identify the most suitable, accredited and consistent techniques.

scholarly journals Business Combinations under Common Control: The Gain/loss Group Perspective. What the IASB Project Leaves Unaddressed

2021 ◽  
Vol 16 (11) ◽  
pp. 59
Author(s):  
Francesco Bellandi
Keyword(s):  
Financial Statements ◽  
Parent Company ◽  
Discussion Paper ◽  
Business Combinations ◽  
Common Control ◽  
Gain Loss ◽  
Real Practice ◽  
Theoretical Apparatus

Although BCUCCs are widespread, a clear treatment is missing under IFRS. Most contributions have taken partial views. This article innovatively provides a systematic theoretical apparatus of the role accounting plays for all the affected members of a group, with a focus on gain or loss opportunities below the consolidated statements. The method used is international technical accounting analysis under IFRS and U.S. GAAP. It shows how a BCUCC may be driven to achieve gain/loss in separate financial statements and how cross-company consistency in policies and substance may reveal gain/loss arbitrage; the interaction of principles for disposals, demergers, and business combinations; and the position of sub-holdings, which in real practice is more relevant than the ultimate parent company. This paper is timely, as the IASB has recently published a Discussion Paper. The IASB project fails to give answers to these points as it only looks at the receiving entity and consolidated statements.

Accounting for Business Combinations: Contrasting IFRS 3 Converged IND AS 103 with AS 14

2014 ◽  
Vol 1 (2) ◽  
Author(s):  
Tanupa Chakraborty
Keyword(s):  
Financial Reporting ◽  
Business Environment ◽  
Global Business ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Accounting Standard ◽  
Business Combinations ◽  
Common Control ◽  
Extensive Coverage ◽  
Compare And Contrast

Business combinations have become the most preferred route for business houses to achieve growth at a faster pace, given today’s intensely competitive global business environment. In regard to accounting for business combinations, the paper aims to compare and contrast the provisions of old Accounting Standard (AS) 14 on ‘Accounting for Amalgamations’ issued by the Institute of Chartered Accountants of India (ICAI) in 1995 with that of new International Financial Reporting Standard (IFRS) 3 converged Indian Accounting Standard (Ind AS) 103 on ‘Business Combinations’ issued by ICAI and notified as ‘standards’ by the Ministry of Corporate Affairs (MCA) in 2011. The paper showcases extensive coverage in Ind AS 103 vis-à-vis AS 14 not only in respect of accounting method, valuation of assets and liabilities, nature of consideration, measurement of non-controlling interest, treatment of goodwill / capital reserve or bargain purchase to mention a few, but also in its reference to various types of business combinations, including that of reverse acquisitions and business combinations under common control.

scholarly journals Business combinations under common control in International Financial Reporting Standards – is authoritative accounting guidance needed?

2017 ◽  
pp. 97-112 ◽  
Author(s):  
Magdalena Janowicz
Keyword(s):  
Financial Reporting ◽  
Inductive Reasoning ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Business Combinations ◽  
Financial Reporting Standards ◽  
Common Control ◽  
The Subject ◽  
The Moment ◽  
Theoretical Issues

Business combinations under common control in International Financial Reporting Standards – is authoritative accounting guidance needed? The purpose of the article is to answer the question if a separate standard (IFRS) is needed for business combinations under common control (BCUCC), which are not governed by any IFRS as the moment. In such cases, the approach resulting from IAS 8 should apply to them, which allows the use of national regulations to account for BCUCC. The authoress shortly described the theoretical issues related to the subject and presented the results of empirical research that verified the practical aspects of the problem. The research methodology involves a literature and legal act analysis, content analysis of financial statements, as well as deductive and inductive reasoning. On the basis of the gathered data the authoress concluded that even the existence of necessary regulations in national GAAPs does not guarantee that all the requirements related to the qualitative characteristics of the reported information are met and, as such, the main objectives for which IFRS were developed may not be met. As such, the authoritative guidance proves necessary. Very little research on the subject was published, thus, this paper may provide some additional guidance as to what issues related to BCUCC should receive particular attention.

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