IFRS 3 - The Equity consolidation in company acquisitions
Scientific Essay from the year 2009 in the subject Business economics - Accounting and Taxes, grade: keine, , language: English, abstract: A purchaser has to be identified in all business combinations in accordance with IFRS 3. This is important because with the purchase method the net assets and liabilities of the acquired company are revalued, whereas the net assets and liabilities of the purchaser remain at book values. The purchaser is the company which obtains control over another company. Control is obtained when an company achieves the power to govern the financial and operating policies of another company, and draws benefits from that activity. As regards the definition of control, two cases are differentiated: Case 1 is based on acquisition of the majority of voting rights, i.e. a majority of more than 50%. Case 2 describes obtaining control where less than half of the voting rights are obtained.
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31 margin accordance with IFRS According to IFRS acquired intangible assets acquisition costs acquisition date and/or supervisory body asset is identifiable assets and debts assets and liabilities balance sheet items book value business combination capitalisation cash stream company acquisition company can determine company’s contingent liabilities contracts deferred taxes determine the composition Determining the acquisition Determining the purchase Equity consolidation equity instruments issued equivalent management body fair value future economic benefit future events goodwill group accounts IASB identifiable assets Identifying the purchaser IFRS 3 margin IFRS 3 old IFRS old version IFRS rev intangible assets e.g. legally acquired company liabilities and contingent Lüdenbach management and/or supervisory net assets presumably the purchaser proportionate equity purchase price allocation purchase price components recorded at fair Recording of assets regulations of IFRS reliably revalued reverse acquisition rules in IFRS similar assets single exchange transaction step The fair subsidiary Unlike IFRS valuation techniques voting rights