Loading...

Duty to report in accordance with IFRS 3

Scientific Essay 2009 6 Pages

Business economics - Accounting and Taxes

Excerpt

Contents

1. General reporting obligations

2. Reporting obligations concerning the first consolidation

3. Reporting obligations relating to subsequent consolidation

1. General reporting obligations

In principle, the acquiring company has to publish various information about the business combinations transacted in a reporting period in its group accounts. This is true both for those business combinations which took place during the reporting period[1] and for those post-balance sheet business combinations which took place before release for publication of the financial statements.[2]

The information provided in the context of the report are meant to enable the reader of the year-end accounts to judge the type and the financial effects of the business combinations.[3]

Information deemed necessary to disclose includes in particular profits, losses and error corrections of business combinations, as well as changes in derivative goodwill.

Information to be made available in the context of business combinations is meant to include in particular the following:

1. Fundamental information on the type and on the financial effects of the business combinations[4]
2. Additional data on financial effects of profits, losses, error corrections and other adjustments[5]
3. Additional data on goodwill[6]
4. Additional information on any possibly present negative balancing amount[7]

The purpose of this information is to enable the addressee to understand accurately the type and financial effects of the business combinations, the financial effects of profits, losses, error corrections and other adjustments, as well as the changes in book value of goodwill during the reporting period. Accordingly, there are different requirements for the reporting obligations concerning the first and subsequent consolidation.

2. Reporting obligations concerning the first consolidation

The following information is to be given for all business combinations in the year of the first consolidation:[8]

1. The name and descriptions of the combined companies or businesses
2. The acquisition date
3. The percentage share of the acquired equity instruments with voting rights
4. The purchase costs of the combination and a description of the components of these purchase costs, including all costs directly attributable to the combination
5. Details of all business units which the company wants to sell as a consequence of the business combination
6. The amounts set for each group of assets, liabilities and contingent liabilities of the acquired company as recorded at the acquisition date, and the book values of each of these classes determined in accordance with IFRS directly before the combination. If the data is not practicable and economically justifiable for this, this fact as well as an explanation why are to be given.
7. The amount of every negative balance charged to profit in accordance with IFRS 3.56 and the items in the profit and loss account to which the surplus was recorded
8. A description of the factors contributing to the purchase costs, which led to the recording of the goodwill
9. A description of every intangible asset not recorded separately from goodwill and an explanation why the fair value of the intangible asset could not be reliably valued; or a description of the type of each negative balance which was posted to profit in accordance with paragraph 56.
10. The amount of profit or loss of the acquired company since the acquisition date which is contained in the period result of the acquiring company. If the information is not practicable or economically justifiable, this fact is to be given as well as an explanation why.

To make things easier, it is possible to summarise those business combinations which took place during a reporting period and are not of significant importance to be considered separately.[9]

[...]


[1] Cf. IFRS 3.66 (a)

[2] Cf. IFRS 3.66 (b)

[3] Cf. IFRS 3.66

[4] Cf. IFRS 3.66 to 3.71

[5] Cf. IFRS 3.72 f

[6] Cf. IFRS 3.74 to 3.76

[7] Cf. IFRS 3.67

[8] Cf. IFRS 3.67

[9] Cf. IFRS 3.68

Details

Pages
6
Year
2009
ISBN (eBook)
9783640243815
File size
396 KB
Language
English
Catalog Number
v121000
Tags
Duty IFRS

Author

Share

Previous

Title: Duty to report in accordance with IFRS 3