1 / 8

Business Combination and Consolidation No.3

Audio: Please use headphone for clarity. Business Combination and Consolidation No.3. D.V.Ramana ramana@ximb.ac.in. Relevant Accounting Standard. IFRS-3: Business Combination IndAS-3: Business Combination AS-14:Amalgamation IAS-27:Consolidation. Purchase Consideration.

nyssa-tanner
Download Presentation

Business Combination and Consolidation No.3

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Audio: Please use headphone for clarity Business Combination and Consolidation No.3 D.V.Ramana ramana@ximb.ac.in

  2. Relevant Accounting Standard • IFRS-3: Business Combination • IndAS-3: Business Combination • AS-14:Amalgamation • IAS-27:Consolidation

  3. Purchase Consideration • Determination of Purchase • Assets based • PC = Assets - Liabilities • Earning based • PC = PV of FCF • Market price based • PC = Shares Acquired * MP of shares

  4. Purchase Consideration • Discharge • Cash • Shares • Bonds and Debentures • Combination of above

  5. Standalone Balance Sheet • Asset Side • Shares acquired will appear as investment • Reduction in Cash (if paid by cash) • Sources side (depending on the mode of payment) • Increase in capital • Shares Premium • Bonds or Debentures

  6. A acquires 480 shares for 15000 Discharged by payment of cash

  7. Consolidated Balance Sheet (CBS) • CBS is required if the company acquires control of another company • CBS will show the assets and liabilities of the buyer and seller • CBS shows the financial position of the reporting entity

  8. Consolidated Balance Sheet • Good will • Purchase Consideration • Less • Proportionate Equity Acquired • Minority Interest (non-controlling interest) • Total Equity of the seller • Less • Majority Equity Acquired

More Related