IFRS Accounting for Business Combinations (2 days)

Introduction

Accounting for business combinations often presents considerable challenges for IFRS preparers. This two-day program provides a comprehensive understanding of, and hands-on practice in, applying the IFRS requirements on business combinations, consolidated financial statements and interests in associates, joint ventures and joint operations.

Our specialist instructors will explain and review the relevant parts of the following Standards:

• IFRS 3 Business Combinations
• IFRS 10 Consolidated Financial Statements
• IFRS 11 Joint Arrangements
• IFRS 12 Disclosure of Interests in Other Entities
• IAS 28 Investments in Associates and Joint Ventures

Using illustrative examples and real-world financial statements, the theory and practical application of the acquisition method of accounting for business combinations is demonstrated in an interactive group environment. The program also gives delegates a sound understanding of the requirements and methodology for accounting for acquiring and losing control of interests in joint arrangements and associates.

The course answers questions such as:

• What constitutes a ‘business’ and a ‘business combination’?
• What is included and excluded when calculating the consideration transferred in a business combination?
• How are contingent payments, subsequent fair value adjustments, contingent liabilities and intangible assets treated in a business combination?
• How are goodwill and non-controlling interests measured?
• How does IFRS 10's definition of control affect the scope of consolidated financial statements?
• How is IAS 28’s equity method of accounting applied to associates and joint ventures?
• How does IFRS 11 impact the treatment of joint arrangements?

Learning Objectives

• Differentiate between different levels of investment and identify the appropriate accounting treatment
• Perform a purchase price allocation exercise and calculate goodwill by applying the rules in IFRS 3 Business Combinations
• Evaluate the impact of contingent consideration and implement the special recognition and measurement rules for contingent liabilities
• Perform equity accounting for an associate or joint venture by applying IAS 28
• Identify the two forms of joint arrangement and apply the appropriate accounting methods

Who Should Attend

Individuals with interests in, or responsibilities for, preparing IFRS consolidated financial statements following business combinations and/or acquisitions of interests in associates or joint arrangements:

• Accountants with group reporting responsibilities
• Professionals involved in M&A transactions
• Internal auditors
• Analysts and advisors
• Systems professionals

Topics

• Acquisition method of accounting – IFRS 3
  • Definitions: business and business combination
  • Scope exemptions
  • Identifying the acquirer
  • Determining the date of acquisition
  • Recognising and measuring identifiable assets acquired, liabilities assumed, and non-controlling interests
    • Recognition principle
    • Measurement principle
  • Recognising and measuring goodwill or a gain from a bargain purchase
    • Consideration transferred
    • Accounting for goodwill
  • Business combinations achieved in stages
  • Business combinations achieved without the transfer of consideration
  • Provisional fair values and measurement period adjustments
  • Subsequent measurement and accounting
    • Reacquired rights
    • Contingent liabilities
    • Indemnification assets
    • Contingent consideration
  • Disclosures
• Consolidated financial statements – IFRS 10
  • Determining control
  • Accounting for changes in ownership interests
• Joint arrangements – IFRS 11
  • Joint control
  • Accounting for joint operations
  • Accounting for joint ventures
• Investments in associates and joint ventures – IAS 28
  • Acquisition and loss of significant influence
  • Applying the equity method
  • Impairment
• Interests in other entities – IFRS 12
  • Disclosure
  • Unconsolidated structured entities

Teaching Method

• Group live instruction with active participation encouraged, cases, examples, group work, open discussions
• Review of the general requirements of IFRS 3 Business Combinations
• Demonstration of accounting issues relating to acquiring interests in associates and joint arrangements
• Extensive hands-on case studies completed in an interactive group environment to demonstrate key points and practical application
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Instructors

Venue

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

 

Field of study: Accounting

Prerequisites

Basic understanding of accounting for business combinations and consolidations under any GAAP. No advance preparation is required for this course.