Course Overview

The purpose of this seminar is to familiarise participants with all aspects of accounting for mergers and acquisitions. There are have been a number of significant changes to the IFRS Reporting Standards dealing with business combinations including:

• IFRS 3 – business combination
• IFRS 10 – Consolidation (new definition of control)
• IFRS 11 – Joint arrangements (comprehensive new guidance)
• IFRS 12 – Disclosures of interests in other entities

The programme will cover the main changes introduced by the above and how the conclusions compare with existing UKGAAP.

The complexities of consolidation will be carefully explained and participants will grasp the accounting consequences of the different techniques, thereby enabling them to gain a better comprehension of published accounts and their interpretation.

In particular the course will cover the potential treatments of goodwill, the necessary treatment and disclosures regarding joint ventures and alternate group structures.

Course Content

The concept of control

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

Consolidated accounts

• The basic techniques
• Goodwill, minority interests, capital reserves

Complex group structures

• Sub-groups
• D-shaped groups
• Vertical groups
• Step-by-step acquisitions

Acquisition or merger? The qualifying criteria

• Acquisition accounts – valuing the consideration given (including contingent and deferred consideration), the treatment of indirect costs of the purchase
• Assigning fair values on acquisition and calculating goodwill
• Accounting for goodwill – the old and new treatments
• Merger accounting – key differences to acquisition accounts
• Disposal of subsidiaries (discontinued activities)

Other group arrangements

• Associates
• Joint ventures
• Joint arrangements that are not entities (JANEs)
• Special purpose entities, quasi-subsidiaries and variable interest entities
• Disclosure of group and other related parties
• Exemptions for sub-groups, small and medium sized groups and for parent company accounts
• Cross border issues