Dear All,
My question is that, in a situation of merger or business combination, where the structure is such that a new company A is formed to take over the businesses of B and C.
The question is whether IFRS 3 Business Combinations is applicable in this case as practically the entire IFRS 3 is based on an Acquirer and an Acquiree which are not present in this structure.
Thanks
Zuhar

Dear All,
Please let me know the treatment of Existing negative goodwill incase of first time adoption of IFRS
Regards
Chirag

Hi all,
Can you please help me with the following queries. Thanks in advance!
1. Goodwill – On consolidation, is it possible to actually increase goodwill figures or can goodwill only be reduced/impaired?
2. IFRS 3 states that negative goodwill is to be credited to the income statement. So if we CR Income, what’s the other double entry?
Apologies if the questions are basic!
Thanks

Dear All,
Request your valuable advice on the entries to be passed in the books of 1. Consolidated company 2. Stand Alone Parent Company for the purchase of shares on March 1,2009 and also the treatment of Goodwill.
Company X had already acquired 50 % of shares of Company Y 2 years back for a cash consideration of $65,000(Total Value of Common Stock/shares #1000).The parent company has been recording the investment under equity method and as on Feb 28,2009, the carrying value of investment is $69,000 (after considering the post acquisition share …

Dear all,
I need clarification with regard to how to treat an intra group trading b/n parent and subsidiaries group accounts during preparation of consolidated statement of financial position as well as income statement. I always confuse and need a clear guideline on how to treat it.
For instance
the subsidiary sold to the parent in the post acquisition period for an amount of $8million. The subsidiary made a mark up on cost of 40% on the sales. The Parent sold $5.2 million(at cost to the parent) of these goods. How should I …

In case of newly established subsidiary, which have not stared his commercial activities and in construction phase, is it require to consolidate it or we can show it on cost. Plz tell me What will be the right treatement

Dear All,
The Company was incorporated in Oct 2007.Could you please give your
expert opinion on the treatment of preliminary expenses (Revenue
generation is not yet started) e.g. rent, salary, traveling etc.
incurred during Oct 2007- Aug 2008. Please reply in reference to IFRS.
Revenue is expected in Sept 2008.
In my view, preliminary expenses can be accumulated and amortized when
revenue is started due to matching concept.
BestRegards,
Hemant

Preliminary expenses / startup costs, etc. cannot be deferred. They
have to be charged off to income statement in the year of actual
startup of operations.
–
Thanks & Regards
Anand

Hemant,
Whether to Deffer the preliminary …

Suppose Entity A acquires Entity B in a business combination and all the considerations have been completed by 31 December 2007 except that government approval which was still pending as at year end. Should entity A consolidate Entity B as at 31 December 2007?

Regards,

Nyasha

I believe the answer lies in the issue of control. If the acquirer still does not have control, i.e. voting rights, directorship, active management, no consolidation should be done until Control is obtained. In the meantime, the Acquirer can book in the investments in subs as …

Dear All,
one of our Client has purchased a 100 % interest in a Subsidiarywhich is loss Making…
 
He has passed the following entry in their own books
 
Goodwill DR                120,000
Investment CR                          20,000       (Equity of subsidiary)
Payable to subsidiary              100,000        (purchase price)
 
My question is can Investment AC be -VE at initiation. and as far as i remember the initial recognition of an asset should be at its cost.and my plea to the Client is that the entry should be
 
Investment DR 100,000
                 Payable           100,000
and goodwill be shown in Consolidated ACs.
 
Kindly comment….and correct me if i am wrong.
 
Regards
I …

Hey ya’ll,
 
I need some guidance with the following issue:
 
In August 2000, Company A bought Company B.
 
Company A hired an Advisor to help it in obtaining financial resources to buy Company B. The advisor fees will be paid by Company A with a 3% of the future dividends to be distributed by Company B. To me it seems that this fees are attributable to the business combination.
 
In November 2000, Company A – Company B and the Advisor signed off an arrangement which established that the advisory fees will be assumed by Company B.
 
So, I’m pretty much …