1. IFRS 3 Business Combinations Mumbai, December 20, 2005 P.R. RAMESH - Deloitte
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5. Purchase Method Identify an Acquirer Determine the cost of the business combination Allocate the cost of the business combination
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Notes de l'éditeur
OPENING COMMENTS The following are applicable only if presented as a stand-alone module: Welcome participants Introduce yourself with special emphasis on practical experience If necessary - use introduction as an ice-breaker Introduce content map and objectives (details on next 2 slides) Set learning environment guidelines (questions any time) Emphasise peer learning opportunities (working in pairs, sharing problems) Introduce Module Learning Objectives Understanding the rationale and conceptual logic of the revised Standard. The principal issues in accounting for property, plant and equipment are the timing of recognition of the assets, the determination of their carrying amounts and the depreciation charges to be recognised in relation to them. Module opening comments This is a revised Standard, effective for annual financial statements beginning on or after 1 July 1999. Earlier application is encouraged. If the Standard is adopted for a financial period beginning prior to this date, the enterprise should disclose that fact and adopt IAS 22 (revised 1998), Business Combinations, IAS 36 Impairment of Assets, and IAS 37 Provisions, Contingent Assets and Contingent Liabilities at the same time. There are no transitional provisions in the revised Standard, as the basic accounting treatments do not differ from those prescribed by the 1993 Standard. The main purpose of the latest revision was to make the Standard consistent with IAS 22 (revised 1998), Business Combinations, IAS 36, Impairment of Assets, and IAS 37, Provisions, Contingent Liabilities and Contingent Assets. There are no significant changes to the basic principles of the Standard as revised in 1993. Date of review of module and approval by technical specialist: Date: 07/99
Slide level: 1 and 2 The principal issues listed on the slide will be addressed in the sections of this module dealing with the recognition and measurement of property, plant and equipment. Timing of recognition addresses the question of when an item of property, plant and equipment should be recognised in the balance sheet, and when should it be de-recognised, ie eliminated from the balance sheet. Determination of carrying amount addresses the question of the amount at which the asset is reflected in the balance sheet: when it is initially acquired; when subsequent expenditure is made after the acquisition (e.g. improvements); and how its value is adjusted for external factors (such as changes in market price, obsolescence as a result of new technology, etc.) during the course of its useful life. Depreciation addresses the issue of how to allocate the carrying amount of the asset to the income statement over its useful life, in order to achieve matching between the cost of the asset and the economic benefit derived therefrom (e.g. the income derived from the sale of the goods manufactured with a piece of machinery).
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