scholarly journals Measurement Base in Financial Accounting and Business Combinations and Transformations of Business Companies - Examples from practice

2015 ◽  
Vol 2015 (4) ◽  
pp. 59-77
Author(s):  
Hana Vomáčková
Keyword(s):  
Financial Accounting ◽  
Business Combinations ◽  
Measurement Base

Understanding Accounting for Business Combinations: An Instructional Resource

2007 ◽  
Vol 22 (2) ◽  
pp. 255-284
Author(s):  
Hugo Nurnberg ◽  
Jan Sweeney
Keyword(s):  
Intangible Assets ◽  
Financial Statements ◽  
Merger And Acquisition ◽  
Political Context ◽  
Financial Accounting ◽  
Business Combinations ◽  
Fresh Start ◽  
Instructional Resource ◽  
Homework Problem

In explaining Statement No. 141, Business Combinations (SFAS No. 141, FASB 2001b) and Statement No. 142, Goodwill and Other Intangible Assets (SFAS No. 142, FASB 2001c), accounting textbooks do not adequately describe the theoretical choices the FASB considered or the economic and political context in which the FASB developed these statements. This instructional resource fills that gap. It compares purchase, pooling of interests (hereafter, pooling), and fresh start accounting, as well as various methods of accounting for goodwill under purchase and fresh start accounting; it also discusses the economic and political context in which the FASB deliberated. A simple example (and a separate more complicated homework problem) compares the effects of these methods on post-combination financial statements. The Teaching Notes discuss how to use this instructional resource to introduce these subjects and integrate them with other subjects covered in advanced financial accounting and merger and acquisition courses.

scholarly journals Analysis of Business Combination Implementation at PT China Construction Bank Indonesia

2018 ◽  
Vol 4 (2) ◽  
pp. 184
Author(s):  
Andita Wulandari K ◽  
Zanuar Arifin ◽  
Amrie Firmansyah
Keyword(s):  
Financial Accounting ◽  
Business Combinations ◽  
Business World ◽  
Financial Conditions ◽  
China Construction Bank ◽  
Technological Advances ◽  
Financial Failure ◽  
Qualitative Descriptive ◽  
Business Combination ◽  
Market Consolidation

<p>This study aims to review the implementation of mergers conducted by the company. In Indonesia, merger activities are regulated in Indonesia Statement of Financial Accounting Standards Number 22 (hereinafter referred to as PSAK 22) concerning Business Combinations. Increased merger activities in the business world are driven by changes in economic conditions. The rise of merger and acquisition activities was caused by various things, such as technological advances, increasing financial conditions, excess capacity/financial failure, international market consolidation and deregulation.</p><p>The research method used in this research is qualitative descriptive with case studies of business combination events that occurred between PT Bank Windu Kentjana Internasional, Tbk as the party which received the merger and PT Bank Antardaerah as the company which joined. Regarding ownership, the name of PT Bank Windu Kentjana Internasional, Tbk changed to PT China Construction Bank Indonesia, Tbk (PT CCB Indonesia, Tbk).</p>The results of this study indicate that in general, the consolidated report of PT CCB Indonesia, Tbk for the period ended December 31, 2016, in general, has been prepared by PSAK 22, 2015.

scholarly journals New Accounting Guidance For Business Combinations

2011 ◽  
Vol 1 (1) ◽  
Author(s):  
Allen W. McConnell ◽  
Bill D. Cox ◽  
John E. Elsea
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Business Combinations ◽  
Accounting Principles ◽  
Business Combination

The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141 Business Combinations in June 2001.  SFAS 141 supersedes Accounting Principles Board (APB) Opinion No. 16 Business Combinations and SFAS No. 38 Accounting for Preacquisition Contingencies of Purchased Enterprises.  APB Opinion 16 created two acceptable methods of accounting for a business combination, the purchase and the pooling of interests methods.  These two different methods often resulted in very different financial results for economically similar transactions.

A HISTORY OF POOLING OF INTERESTS ACCOUNTING FOR BUSINESS COMBINATIONS IN THE UNITED STATES

1991 ◽  
Vol 18 (2) ◽  
pp. 155-192 ◽  
Author(s):  
Frank R. Rayburn ◽  
Ollie S. Powers
Keyword(s):  
Accounting Standards ◽  
The United States ◽  
Securities And Exchange Commission ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Business Combinations ◽  
Accounting Principles ◽  
History Of ◽  
Business Combination ◽  
The Subject

This paper traces the development of pooling of interests accounting for business combinations from 1945 to 1991. The history of the pooling concept is reviewed chronologically with particular emphasis on the events of 1969–1970 that were related to the most recent pronouncement on the subject, Accounting Principles Board (APB) Opinion No. 16. Early in its life (1974), the Financial Accounting Standards Board (FASB) placed a project on its agenda to reconsider pooling of interests accounting. That project was removed from the FASB's agenda in 1981. APB Opinion No. 16 has gone essentially unchanged as it relates to the accounting for a business combination as a pooling of interests. Resolution of implementation issues has been left largely to the Securities and Exchange Commission and the accounting profession. The FASB has a project on its agenda on Consolidations and Related Matters that may impact pooling of interests accounting. There also is some pressure for the FASB to revisit accounting for business combinations.

How Informative Are Earnings Numbers That Exclude Goodwill Amortization?

2001 ◽  
Vol 15 (3) ◽  
pp. 243-255 ◽  
Author(s):  
Stephen R. Moehrle ◽  
Jennifer A. Reynolds-Moehrle ◽  
James S. Wallace
Keyword(s):  
Information Content ◽  
Cash Flow ◽  
Performance Measures ◽  
Intangible Assets ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Business Combinations ◽  
Traditional Performance

In the original exposure draft, Business Combinations and Intangible Assets, the Financial Accounting Standards Board (FASB) proposed that companies be allowed to report a second per share earnings number that excludes goodwill amortization. Subsequently, the FASB has proposed that goodwill not be amortized at all. Instead, it will be written down when impaired. In this study, we assess the information content of earnings excluding amortization of intangibles relative to two traditional performance measures: earnings before extraordinary items and cash flow from operations. We find that the relative informativeness of earnings before amortization and earnings before extraordinary items do not differ significantly. We also find, consistent with prior research, that both earnings before amortization and earnings before extraordinary items are more informative than cash flow from operations. These findings suggest that goodwill amortization disclosures were not decision-useful and, therefore, support the FASB's revised position.

scholarly journals Comparison of accounting methods for business combinations

2012 ◽  
Vol 60 (2) ◽  
pp. 315-324 ◽  
Author(s):  
Jaroslav Sedláček ◽  
Zuzana Křížová ◽  
Eva Hýblová
Keyword(s):  
Comparative Analysis ◽  
Accounting Standards ◽  
International Committee ◽  
Financial Accounting ◽  
Business Combinations ◽  
Financial Position ◽  
Analysis And Synthesis ◽  
Business Combination ◽  
Accounting Rules ◽  
The Impact

The revised accounting rules applicable to business combinations in force on July1st 2009, are the result of several years efforts the convergence of U.S. and International Committee of the Financial Accounting Standards. Following the harmonization of global accounting procedures are revised and implemented also Czech accounting regulations. In our research we wanted to see how changes can affect the strategy and timing of business combinations. Comparative analysis is mainly focused on the differences between U.S. and international accounting policies and Czech accounting regulations. Key areas of analysis and synthesis are the identification of business combination, accounting methods for business combinations and goodwill recognition. The result is to assess the impact of the identified differences in the reported financial position and profit or loss of company.

The Financial Statement Effects of Eliminating the Pooling-of-Interests Method of Acquisition Accounting

2000 ◽  
Vol 14 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Benjamin C. Ayers ◽  
Craig E. Lefanowicz ◽  
John R. Robinson
Keyword(s):  
Balance Sheet ◽  
Financial Accounting ◽  
Financial Statement ◽  
Financial Accounting Standards Board ◽  
Pooling Problem ◽  
Corporate Acquisitions ◽  
Accounting Standard ◽  
Business Combinations ◽  
Public Corporations ◽  
Income Statement

Accounting standard setters have become increasingly concerned with the perceived manipulation of financial statements afforded by the pooling-of-interests (pooling) method of accounting for corporate acquisitions. While different restrictions have been discussed, in September 1999 the Financial Accounting Standards Board (FASB) issued an Exposure Draft to eliminate the pooling method. This study provides a basis for evaluating restrictions on the pooling method by analyzing the financial statement effects on pooling acquisitions made by public corporations over the period 1992 through 1997. Using these acquisitions we (1) quantify the scope of the “pooling problem,” (2) estimate the financial statement repercussions of eliminating the pooling method, and (3) examine the effects of restricting pooling accounting to business combinations meeting various “merger of equals” restrictions. While our analysis does not address whether restrictions on the pooling method will influence the nature or level of acquisition activity, the results indicate that the pooling method generates enormous amounts of unrecognized assets, across individual acquisitions, and in aggregate. In addition, our results suggest that recording and amortizing these assets generate significant balance sheet and income statement effects that vary with industry. Regarding restrictions on the pooling method, our analysis indicates that size restrictions would significantly reduce the number and value of pooling acquisitions and unrecognized assets generated by these acquisitions.

A Gain by Any Other Name: Accounting for a Bargain Purchase Gain

2015 ◽  
Vol 30 (3) ◽  
pp. 233-248
Author(s):  
Mark J. Kohlbeck ◽  
Thomas J. Smith
Keyword(s):  
Fair Value ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Accounting Standard ◽  
Business Combinations ◽  
Market Values ◽  
Accounting Courses ◽  
Value Estimation ◽  
Net Assets ◽  
The Impact

ABSTRACT Students gain insight into a unique accounting treatment in acquisition accounting by completing this case—that of a bargain purchase gain (BPG). In December 2007, the Financial Accounting Standards Board (FASB) revised accounting for business combinations when they promulgated Statement of Financial Accounting Standard No. 141R, Business Combinations. Under the revised standard, acquirers record net assets of the acquiree at their respective fair market values at the time of acquisition and recognize the excess of net assets over the consideration paid as a BPG included in income from continuing operations. This case takes place after the acquisition is negotiated and the consideration is agreed upon. Students are required to estimate fair values of acquired net assets based on the information provided, determine whether goodwill or a bargain purchase gain exists, and evaluate the impact of this transaction on the financial statements. The case also requires students to consider subjectivity within the analysis, as well as to identify potential incentives that may influence certain estimates and judgments that managers make. The case is appropriate for accounting courses where business combinations, goodwill, and fair value estimation are discussed.

scholarly journals Revised Accounting For Business Combinations

2008 ◽  
Vol 1 (2) ◽  
pp. 13-20
Author(s):  
Arlette C. Wilson ◽  
Kimberly Key
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Financial Accounting Standards Board ◽  
Business Combinations ◽  
Business Combination ◽  
Representational Faithfulness ◽  
Acquisition Method

The Financial Accounting Standards Board (FASB) has recently issued Statement of Financial Accounting Standards No. 141 (Revised 2007) Business Combinations. The object of this Statement is to improve the relevance, representational faithfulness, and comparability of reported information about a business combination and its effects. This Statement replaces FASB Statement No. 141, but retains the fundamental requirements that the acquisition method of accounting (previously called the purchase method) be used for all business combinations. Some of the changes related to the accounting for business combinations as a result of the new requirements are discussed and illustrated below.

Pengakuan Pendapatan dan Biaya dalam Kaitannya dengan Penentuan Laba Perusahaan Ekspedisi (Studi Kasus pada PT. EMKL Jelutung Subur)

2019 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Yuli Anwar
Keyword(s):  
Accounting Standards ◽  
Financial Accounting ◽  
Recognition Method ◽  
Important Thing ◽  
Storage Service ◽  
Long Time ◽  
Accrual Basis

Revenue and cost recognitions is the most important thing to be done by an entity,  time and the recognition method must be based on the rules from Financial Accounting Standards. Revenue and cost recognition which is done by PT. EMKL Jelutung Subur located on Pangkalpinang, Bangka Belitung province is done by using the accrual basis, and it can be seen with its influences to company profits every year.  This research is useful to get a data and information for preparing this thesis and improving my knowledge and also for comparing between theories accepted against facts applied in the field.  The result of this research shows that PT. EMKL Jelutung Subur has implemented one of the revenue and cost recognition method (accrual basis) continually, so that profit accuracy is accountable to be used for developing this kind of expedition business in order to become a better company. The accuracy is evaluated because all revenues received and cost spent  have clear evidence and found in the period of time.  The evaluation shows there is one thing that miss from revenue and cost recognition done by PT. EMKL Jelutung Subur, that is charge to the customers who use the storage service temporary, because some customers keep their goods for a long time in the warehouse, and it will increase the costs of loading, warehouse maintenance, damaged goods and decreasing a quantity of goods. If the storage service is charged to the customers, PT. EMKL Jelutung Subur will earn additional revenue to cover all the expenses above

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