Page 50 - Topic 1 - 1.3. Business Combinations

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Calculations

C2. Reacquired right

COMMENT

• Impact of reacquired right on the separate financial

statements:

• If the terms of the contract giving rise to the

reacquired right are not in line with current market
transactions, the contract will have a favourable or

unfavourable component.

• The contract is favourable to Italia as Italia receives an

annual fee of R50 458 in terms of the current

agreement whilst Italia would have received an annual

fee of R35 000 in the market.

• The contract is effectively settled due to the business

combination (the group is viewed as a single entity

and cannot have a contract with itself).

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