Accounting for Business Combinations (M&A) Training Course

This course can also be presented in-house via live webinar.

Accounting for Business Combinations Course Objectives:

The course will reflect the latest state of the following recently introduced or amended accounting standards and of emerging practice with regard to each of them:

    • IFRS 3 – Business Combinations
    • IFRS 10 – Consolidated Financial Statements
    • IFRS 11- Joint arrangements
    • IFRS 12 – Disclosure of Interests in Other Entities
    • IFRS 13 – Fair Value Measurement
  • IAS 27 – Separate Financial Statements
  • IAS 28 – Investments in Associates and Joint Ventures

Accounting for Business Combinations Course Content:

The concept of control

  • Parent and subsidiary undertakings
  • Special purpose entities and arrangements
  • Quasi-subsidiaries

Review of key concepts for business combinations and associated transactions: principles and applications

  • ‘Control’
  • ‘Significant influence’
  • ‘Joint control’
  • ‘A business’

Accounting for acquisition and disposal of full control

  • Deciding whether the subject is a business or a collection of assets: pros and cons of each
  • Identifying the acquirer, the seller and the date of acquisition
  • Identifying all assets and liabilities (including previously unrecognised intangibles)
  • Establishing fair values
  • Treatment of transaction costs
  • Calculating goodwill (also negative goodwill)
  • Acquiring control in stages
  • Treatment of deferred and contingent consideration
  • Provisional and final valuations
  • Relinquishing control in stages
  • Transitions to and from associate or JV status
  • Accounting for acquisition in standalone accounts of parent
  • Consolidation procedures
    • Adjustment to parent company accounting policies
    • Adjustment to fair values
    • Elimination of intercompany items
    • Non-controlling interests: share of net assets or ‘full goodwill’ basis?
    • Allocation of goodwill across CGUs for future impairment reviews
    • Treatment of foreign currency translation gains and losses
    • Special cases – 1: Parent and subsidiary with different functional currencies
    • Special cases – 2: Exemption for consolidation for assets held for resale
    • Special cases – 3: SPVs – consolidate or not? Does accounting treatment necessarily follow regulatory treatment?
  • Disclosures:
    • Initial disclosure of the transaction itself
    • Subsequent disclosures, e.g. related party transactions

Accounting for equity method investments – associated companies

  • Applying the ‘significant influence’ and ‘joint control’ criteria in practice: some ‘counter-intuitive’ cases
  • Equity accounting for associates in consolidated financial statements
    • Establishing the initial share of net assets
    • Goodwill (initial and after subsequent review)
    • Changes in value of share of net assets: distributions
    • Elimination of proportion of intercompany profits and losses
  • Special considerations for accounting for joint arrangements:
    • Joint operations or joint venture?
    • Equity accounting for joint venture (no more ‘proportional consolidation’)
  • Transitions to and from associate/JV status

 Some special topics

  • Secondary impact of transactions on eps, banking covenants, investor ratios and public perceptions
  • Impact of IFRS 13 Fair Value Measurement on initial accounting and on subsequent impairment and impairment reversal reviews
  • Hedging / hedge accounting for M&A transactions (under IAS 39 and IFRFS 9)
  • Hedging / hedge accounting for ongoing net investment in foreign undertaking (under IAS 39 and IFRS 9)
  • Overview of principal changes in IFRS 9 as regards accounting for ‘portfolio’ equity instruments:
    • introduction of new ‘Fair Value through OCI’ category
    • new enhanced disclosure requirements
    • Exemptions available for ‘investment entities’ and for sub-groups

Background of the Trainer:

The trainer is a UK qualified accountant with over 20 years experience of providing technical training on financial reporting regulations including IFRS, USGAAP and U.K. GAAP. His training sessions are designed to be practical, commercially relevant and interesting. The trainer has experience in training all over the world and has provided training for accountants, lawyers and those from a banking and corporate finance banking.

Accounting for Business Combinations Course Summary:

This Accounting for Business Combinations course is designed to give a comprehensive insight into the principles and practice of IFRS accounting and reporting for the full range of transactions under the general umbrella of M&A. In addition to transactions where there is a full change of control, it also considers transactions involving joint control and ‘significant influence’ (i.e. associate status) and transfers among each of these categories. Transactions are considered from the perspectives of all participants (i.e. selling and target entities as well as buyer).

The Accounting for Business Combinations course will also offer a preview of the principal relevant changes resulting from the impending replacement of IAS 39 Financial Instruments: Recognition and Measurement by IFRS 9 Financial Instruments, as well as an insight into the main differences between IFRS as published by the IASB (‘full IFRS’) and the UK’s recently introduced FRS 102 and associated regulations (The New UKGAAP).

The course is interactive in approach and participants are encouraged to bring their own experience (and problems) to bear on group discussions and on the many (almost exclusively real-world) case studies and exercises with which the course is illustrated – and enlivened.

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5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount