Page 14 - Finac2 Test 1 Slides - 2. Business Combinations
P. 14

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS




            Acquisition method





            Recognise the identifiable assets and liabilities


            acquired in the business combination (Step 3)


                    • Recognition criteria : To qualify for recognition the:


                           • Assets and liabilities should meet the definitions of the

                              Conceptual Framework.

                           • Assets and liabilities must be part of what is exchanged in the

                              business combination (not a separate transaction)

                    • Exceptions:


                           • Contingent liabilities should be recognised if there is present

                              obligation and its fair value can be measured reliably.

                           • Recognise               indemnification                 asset         (debtor)            only         if

                              indemnification item (liability) is recognised on acquisition
                              date.




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