Mergers and acquisitions (M&A) occur when businesses combine to achieve corporate objectives.

In an
acquisition, a company purchases another company’s assets, identifiable business segments, or
subsidiaries. In a merger, a company purchases another company in its entirety. In either situation,
there is a union of businesses. Along with mergers and acquisitions come special accounting principles.
This guide will cover purchase accounting for mergers and acquisitions. In order to understand more,
read on Chapter 13 - Business Combinations (IFRS 3) page 1 – 31 of Advanced Accounting Volume 2 –
2017 Edition by Pedro Guerrero and Jose Peralta

a. Business Combination Defined

b. Acquisition of Control

c. Methods of Business Combination

d. Acquisition Method of Accounting for Business Combination

e. Valuation of Identifiable Assets and Liabilities

f. Applying the Acquisition Method

g. Acquisition of Net Assets

h. Acquisition of Stocks

i. Disclosure Requirements