Accounting for Business

Combinations
Measuring Goodwill or
gain on bargain
purchase
  Restructuring is a program that is planned and controlled by
Restructuring management and materially changes either:
A. The scope of business undertaken by an entity; or
Provisions B. The manner in which that business is conducted
  Restructuring provisions are generally not recognized as part of
business combination unless the acquiree has, at the acquisition
Restructuring date, an existing liability for restructuring that has been
recognized in accordance with PAS 37 Provisions, Contingent
Provisions Liabilities and Contingent Assets otherwise it is recognized as
post-combination expenses.
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  The acquirer does not recognize any assets or liabilities related to
Operating an operating lease in which the acquiree is the lessee, except
when the terms is favorable- the acquirer recognizes a intangible
leases asset and if unfavorable –the acquirer recognizes a liability.
Operating  The acquiree is the lessor, the acquirer does not recognize any
separate intangible asset or liability regardless of the terms.
leases
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  Identifiable intangible assets acquired in a business combination
Intangible are recognized separately from goodwill. An intangible asset is
identifiable if it is either : a) separable or b) arises from contractual
assets or other legal rights
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  Under PFRS3, a contingent liability assumed in a business
Contingent combination is recognized if:
1. It is a present obligation that arises from past events; and
Liabilities
2. Its fair value can be measured reliably.
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Exceptions to
A. Income taxes are accounted using PAS 12. Deferred taxes affect
both the amount of goodwill or gain on bargain purchase recognized
recognition at the acquisition date.
B. Employee benefits are accounted for using PAS 19.
and
C. Indemnification assets – indemnified item is measured at fair
measurement value
principles
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