The
article describes how accounting is an art of documenting and interpreting financial
information on away that can be easily understood. The article further says
that budget which are very difficult of all accounting is taught in a very easy
to understand manner.
Growth is a major objective of many business
organizations. A company may
grow gradually expanding its product
lines, facilities or services. In
the past decade, many companies
have achieved their goal
of
expansion through business combinations which
occurs when the operations
of two or more companies (inter- related or outside) are brought under common
Control. The objective
of
this accounting assignment help to specify the guidelines, principles and
requirements in respect of financial reporting by an entity when it undertakes
a business
combination. It aims to enhance the relevance, reliability
and comparability of the information provided in financial statements on business combinations and effects thereof.
In this regard, the Standard establishes
principles and requirements for the entity
obtaining control of the other business for:
A. Recognizing and measuring
in its financial
statements the identifiable assets acquired, the liabilities
assumed and any non- controlling interest of the other business;
B. Recognizing
and measuring the
goodwill acquired in the business combination or a gain from a bargain purchase; and
C. Determining the information to be disclosed
in its financial
statements to enable its users to evaluate
the nature and financial effects of the business combination.
In other
words,
the core principle of the Standard
is that an acquirer of a business recognizes
the assets
acquired
and liabilities assumed at their acquisition-date fair values and
discloses information that
enables
users to evaluate
the nature and financial
effects of the acquisition. hese principles
and requirements lead to accounting under the ‘acquisition method’. Thus all business combinations within the scope of this Standard are to be accounted
for using
the ‘acquisition’ method.
The web site also offers and business
combination as a transaction or other event in
which an entity obtains control
of one or more businesses. In other
words, it is the bringing together of separate entities into one economic entity as a result of one entity obtaining
control over the net assets and operations of another entity.
The Standard
applies to all transactions or other events
which meet the definition
of a business
combination (as given
in
previous paragraph). Transactions referred
to
as ‘true mergers’ or
‘mergers of equals’ are also business combinations.
The following are few examples
of transactions
or events that constitute
a Business Combination:
A. Holding-Subsidiary relationship: an event where an entity’s acquisition of
business of another
entity gives rise to a holding / subsidiary
relationship;
B. Transfer of net assets/equity interests
to
an existing combining
entity: a transaction in which one entity
transfers its net assets, or its owners transfer
their
equity interests,
to another entity or its owners. The term
‘Owners’ is used broadly to include
holders
of equity interests of
investor-owned entities and
owners or members of, or participants in, mutual entities;
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