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Hello everybody Today,

I'm going to talk about my first three business combinations,

entities trade with each other, exchanging one set of facets for another

service or even businesses.

The accounting used for the exchange transaction of

businesses is determined by a first three.

I for three business combinations provide principles for three things.

First, measuring assets, liabilities and non controlling interests.

2nd recognizing goodwill

and lastly disclosing.

Sometimes it is difficult for the acquirer to determine if he

acquired a business or a set of assets or liabilities.

In that case, concentration test is needed in order to decide

now, the method used for accounting for business combinations

is the acquisition method.

The first types of acquisition method are

identified the acquirer, the one that takes control of identity,

determine the acquisition dates

recognized assets and liabilities at fair value

and non controlling interest.

Here I have to mention that non controlling interest is

equity in a subsidiary that is not attributable to the parents

and recognize goodwill.

Goodwill is accounted as an asset representing the future economic

benefits arising from other assets acquired in a business combination

that are not individually identified and separately recognized.

Goodwill of the acquisition date can be measured with the formula zone In the slide,

fair value of consideration transferred

plus non controlling interest

plus fair value of previous equity interests

minus fair value of net assets.

When the results of the equation is lower than zero,

it is called gain on a bargain purchase.

It is a normal transaction as it is not

profitable to sell assets lower than the fair value.

If it happens, acquirer has to reassess and identify errors.

Reception for the last hour,

identify all the assets acquired and liabilities assumed,

measured at fair value of the assets acquired and liabilities assumed,

and measure the consideration transport.

If the calculation saw the same result,

then the negative goodwill is recorded in income.

Now,

some reasons why the situation might arise are

because the acquirer has excellent negotiation skills.

All the inquiry was forced to sell going to specific circumstances

such as cash flow problems.

Now we have to I have to know that again on a

bargain purchase and Goodwill cannot be

recognized in the same business combination.

Not for disclosure,

it occurs during the current reporting period or

after the end of the reporting period,

but before the financial statements are authorized. For issue.

Note that the qualitative information regarding the

primary reasons for the business combination,

as well as a description of how the car obtained control of the carry,

are required to be disclosed.

This information should assist users to evaluate the success of the business

combination and charge the ability of management to make investment decisions.

Thank you for your time

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