Chapter 31 - Business combinations: IFRS 3. The main contents of the chapter consist of mains parts: Related standards, IFRS 3, current GAAP comparisons, IFRS financial statement disclosures, looking ahead, end-of-chapter practice. | Business Combinations: IFRS 3 Wiecek and Young IFRS Primer Chapter 31 Earnings per Share Related standards IFRS 3 Current GAAP comparisons IFRS financial statement disclosures Looking ahead End-of-chapter practice Related Standards FAS 141(R) Business Combinations Related Standards IAS 27 Consolidated and Separate Financial Statements Framework for the Preparation and Presentation of Financial Statements IFRS 3 – Overview Objective and scope Identifying a business combination The acquisition method Subsequent measurement and accounting Disclosures IFRS 3 – Objective and Scope The Basics referred to as mergers and acquisitions major activity in world’s capital markets Objectives 1. how to recognize and measure identifiable assets acquired, liabilities assumed, and non-controlling interest 2. how to recognize and measure goodwill acquired, or a gain if a bargain purchase 3. necessary disclosures to help users evaluate nature and financial effects of the business combination IFRS 3 – Objective and Scope Business combination transaction or event where acquirer obtains control of one or more businesses includes “mergers of equals” Exclusions to IFRS 3 formation of a joint venture acquisition of asset or group of assets that is not a “business” combination of entities or businesses under common control IFRS 3 – Identifying a Business Combination Has a business combination taken place? do assets acquired constitute a business if only acquisition of a group of assets it is not a business total cost of group is allocated to individual assets based on relative fair values Business integrated set of activities and assets capable of being managed to provide a return in form of dividends lower costs provide other benefits to investors, other owners, members or participants Essential elements of a business it has inputs processes applied to inputs that are used to create outputs IFRS 3 – The Acquisition Method On acquisition Account for using | Business Combinations: IFRS 3 Wiecek and Young IFRS Primer Chapter 31 Earnings per Share Related standards IFRS 3 Current GAAP comparisons IFRS financial statement disclosures Looking ahead End-of-chapter practice Related Standards FAS 141(R) Business Combinations Related Standards IAS 27 Consolidated and Separate Financial Statements Framework for the Preparation and Presentation of Financial Statements IFRS 3 – Overview Objective and scope Identifying a business combination The acquisition method Subsequent measurement and accounting Disclosures IFRS 3 – Objective and Scope The Basics referred to as mergers and acquisitions major activity in world’s capital markets Objectives 1. how to recognize and measure identifiable assets acquired, liabilities assumed, and non-controlling interest 2. how to recognize and measure goodwill acquired, or a gain if a bargain purchase 3. necessary disclosures to help users evaluate nature and financial effects of the business .
