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Group accounting – Basic groups

5.2 Identify the acquirer

The acquirer is the entity that has assumed control over another entity.

If it is not clear which company is the acquiring company then IFRS 3 provides
guidance.

The acquirer is normally the company that has transferred cash, other
assets or shares in the business combination.

Other factors to consider include:

 which entity’s former management dominates the combined entity?

 which entity’s former owners have the greatest number of votes in the combined
entity?

 which entity was bigger?

Illustrations and further practice

You can now attempt TYU question 2 from Chapter 19.

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