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Introduction

• Accounting Standards dealing with acquisition and merger (M&A) activities are evolving overtime to keep pace with the constant changing business environments. 
• Acquisition of a business can often involved myriad of transactions being exchanged between the acquirer and the acquiree. 
• These transactions can range from a simple cash payment to exchanging of assets and liabilities, issue of complex financial instruments and deferred settlement that may or may not involve contingent events in the future. 
• Upon completion of a M&A transaction, the acquirer needs to account for additional line items such as goodwill, intangible assets, contingent liabilities and often including non-controlling interest in the consolidated financial statements and the investment interest in the separate financial statement.

Programme Objective

• This seminar takes a systematic approach to enhance a preparer’s skills in handling the accounting for M&A activities and the application “Acquisition method” in accordance with IFRS3 Business Combination
• How to handle group restricting that are under common control whether to use “acquisition method” or “book-value method”
• Handling the initial accounting for M&A activities and to provide a step-by-step guide on applying the principle of business combination

Programme Outline

The business combination environment

• The scope of IFRS 3 Business Combinations
• Determine what is a ‘business’ 
• Interaction between IFRS 3, IAS27 and IFRS 10
• Identify common control and its effect on business combinations
• Dealing with M&A that does not involve the transfer of a business

The six-step approach in applying acquisition method

1. Identifying the acquirer
   • Determining control – Voting rights and potential voting right
   • Identifying acquirer when two or more entities are combined
   • Identifying acquirer when business combination effected by cash or by exchange of equity shares
   • Determining acquirer when a new entity is formed to affect the combination of several existing entities 
2. Determining the acquisition date
   • The importance of closing date and the effect on date of acquisition
3. Recognising and measuring the identifiable assets acquired and liabilities assumed in acquiree:
   • Determining fair value of identifiable assets acquired and liabilities assumed
   • Accounting for contingent liabilities of acquiree
   • Dealing with indemnification assets
   • Measurement of pre-existing relationship
   • Measurement of required rights
   • Recognizing and measuring deferred tax at date of acquisition
4. Recognising and measuring non-controlling interest
   • Valuation of non-controlling interest
   • Goodwill attributable to non-controlling interest
5. Accounting for Cost of investment interests in the separate financial statement of an investor
   • Dealing with acquisition related costs
   • Recognising and valuing the consideration transferred
   • Measuring previous holdings
   • Measuring the exchange of non-cash consideration
   • Treatment of deferred consideration and contingent consideration
6. Determining ‘goodwill’ and ‘bargain purchase’ arising from business combination
   • Determine the pre-acquisition reserves and fair value adjustments for subsequent consolidation purposes
   • Testing goodwill for impairment
   • Additional procedures required for confirming a ‘bargain purchase’

A brief on measurement period after the date of acquisition

• The use of the one-year measurement period after the date of acquisition 
• Retrospective adjustment of goodwill within the one-year measurement period

Training Methodology
A highly interactive session with trainer-led facilitation, live Q&As, quick polls/surveys, and self-assessment quizzes.

Closing Date for Registration

1 week before programme or until full enrolment

Intended For

This programme is suitable for preparers and auditors of financial statements, members of audit committee, finance directors and regulators. Those who are keen on attending a practical course that examines the initial accounting for business combinations are welcome to attend.

Programme Facilitator(s)