Accounting for partial acquisitions and disposals - it's not so simple! In an economic environment where many companies are buying and selling portions of businesses, the M&A Standards will have an impact on how companies account for these types of transactions. At first glance, the fundamental concept of "control" that drives the accounting seems easy to understand. If a company gains control, the acquisition is a business combination. If a company loses control, it deconsolidates the subsidiary. If a company maintains control, the transaction is recorded in equity. Simple, right? Not so fast!
This volume of Mergers & Acquisitions - A snapshot, will discuss several intricacies in the M&A Standards relating to the accounting for partial acquisitions and disposals that may impact how companies report financial results and communicate to shareholders.