Join Your Exam WhatsApp group to get regular news, updates & study materials HOW TO JOIN

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The acquirer shall disclose information that enables users of its financial statements to evaluate the nature and financial effect of a business combination that occurs either.
(a) during the current reporting period.
(b) after the end of the reporting period but before the financial statements are authorised for issue.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The acquirer shall disclose information that enables users of its financial statements to evaluate the financial effects of adjustments recognised in the current reporting period that relate to business combinations that occurred in the period or previous reporting periods.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : In general, an acquirer shall subsequently measure and account for assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination in accordance with other applicable IFRSs for those items, depending on their nature. However, this IFRS provides guidance on subsequently measuring and accounting for the following assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination:
(a) reacquired rights.
(b) contingent liabilities recognised as of the acquisition date.
(c) indemnification assets.
(d) contingent consideration.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : A reacquired right recognised as an intangible asset shall be amortised over the remaining contractual period of the contract in which the right was granted. An acquirer that subsequently sells a reacquired right to a third party shall include the carrying amount of the intangible asset in determining the gain or loss on the sale.

After initial recognition and until the liability is settled, cancelled or expires, the acquirer shall measure a contingent liability recognised in a business combination at the higher of:
(a) the amount that would be recognised in accordance with IAS 37.
(b) the amount initially recognised less, if appropriate, the cumulative amount of income recognised in accordance with the principles ofIFRS 15 Revenue from Contracts with Customers. This requirement does not apply to contracts accounted for in accordance with IFRS 9.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : At the end of each subsequent reporting period, the acquirer shall measure an indemnification asset that was recognised at the acquisition date on the same basis as the indemnified liability or asset, subject to any contractual limitations on its amount and, for an indemnification asset that is not subsequently measured at its fair value, management’s assessment of the collectibility of the indemnification asset. The acquirer shall derecognise the indemnification asset only when it collects the asset, sells it or otherwise loses the right to it.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The fair value of contingent consideration that are not measurement period adjustments as follows:

  1. Contingent consideration classified as equity shall not be remeasured and its subsequent settlement shall be accounted for within equity.
  2. Other contingent consideration that:
    1. is within the scope of IFRS 9 shall be measured at fair value at each reporting date and changes in fair value shall be recognised in profit or loss.
    2. is not within the scope of IFRS 9 shall be measured at fair value at each reporting date and changes in fair value shall be recognised in profit or loss.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 :  The objective of this IFRS is to improve the relevance, reliability and comparability of the information that a reporting entity provides in its financial statements about a business combination and its effects. To accomplish that, this IFRS establishes principles and requirements for how the acquirer:

  1. Recognises and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree.
  2. Recognises and measures the goodwill acquired in the business combination or a gain from a bargain purchase.
  3. Determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The objective of the IFRS is to enhance the relevance, reliability and comparability of the information that an entity provides in its financial statements about a business combination and its effects. It does that by establishing principles and requirements for how an acquirer:

  1. recognises and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree.
  2. recognises and measures the goodwill acquired in the business combination or a gain from a bargain purchase.
  3. determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

IFRS Disclosures FOR IFRS 3 : An acquirer of a business recognises the assets acquired and liabilities assumed at their acquisition-date fair values and discloses information that enables users to evaluate the nature and financial effects of the acquisition.

A business combination must be accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control or the acquiree is a subsidiary of an investment entity, as defined in IFRS 10 Consolidated Financial Statements, which is required to be measured at fair value through profit or loss. One of the parties to a business combination can always be identified as the acquirer, being the entity that obtains control of the other business (the acquiree). Formations of a joint venture or the acquisition of an asset or a group of assets that does not constitute a business are not business combinations.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The IFRS establishes principles for recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. Any classifications or designations made in recognising these items must be made in accordance with the contractual terms, economic conditions, acquirer’s operating or accounting policies and other factors that exist at the acquisition date.

Each identifiable asset and liability is measured at its acquisition-date fair value. Non-controlling interests in an acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are measured at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s net identifiable assets. All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless another measurement basis is required by IFRSs.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The IFRS provides limited exceptions to these recognition and measurement principles:

  1. Leases and insurance contracts are required to be classified on the basis of the contractual terms and other factors at the inception of the contract (or when the terms have changed) rather than on the basis of the factors that exist at the acquisition date.
  2. Only those contingent liabilities assumed in a business combination that are a present obligation and can be measured reliably are recognised.
  3. Some assets and liabilities are required to be recognised or measured in accordance with other IFRSs, rather than at fair value. The assets and liabilities affected are those falling within the scope of IAS 12 Income
  4. There are special requirements for measuring a reacquired right.
  5. Indemnification assets are recognised and measured on a basis that is consistent with the item that is subject to the indemnification, even if that measure is not fair value.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The IFRS requires the acquirer, having recognised the identifiable assets, the liabilities and any non-controlling interests, to identify any difference between:

  1. the aggregate of the consideration transferred, any non-controlling interest in the acquiree and, in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree.
  2. the net identifiable assets acquired. The difference will, generally, be recognised as goodwill. If the acquirer has made a gain from a bargain purchase that gain is recognised in profit or loss.

IFRS Disclosures FOR IFRS 3

IFRS Disclosures FOR IFRS 3 : The consideration transferred in a business combination (including any contingent consideration) is measured at fair value.

In general, an acquirer measures and accounts for assets acquired and liabilities assumed or incurred in a business combination after the business combination has been completed in accordance with other applicable IFRSs. However, the IFRS provides accounting requirements for reacquired rights, contingent liabilities, contingent consideration and indemnification assets.

IFRS Disclosures FOR IFRS 3

Cakart.in provides India’s top IFRS faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get IFRS Video classes from www.cakart.in  to do a great preparation for primary Student.

Watch IFRS sample video lectures visit www.cakart.in
Watch  IFRS  sample lecture books   visit www.cakart.in
Watch IFRS free downloads   visit www.cakart.in

Leave a comment

Your email address will not be published. Required fields are marked *