PRACTICAL APPLICATION EXAMPLES FOR SPECIAL CASES IN THE SCOPE OF CONSOLIDATION ACCORDING TO IFRS

Markus Hafele () and Celine Frei ()
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Markus Hafele: Hochschule Pforzheim University, Federal Republic of Germany
Celine Frei: Hochschule Pforzheim University, Federal Republic of Germany

Interdisciplinary Management Research, 2014, vol. 10, 501-512

Abstract: Business combinations under common control are “business combinations in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory” (IFRS 3.B1). These issues often are undertaken for many different reasons to achieve purposes that vary from business combinations of entities not under common control, i. e. reorganise group activities with an aim to achieve synergies or to obtain tax efficiency within the group. The European Financial Reporting Advisory Group explains that the often complex structures and arrangements to effect such changes raise considerable challenges for financial reporting. International Financial Reporting Standards (IFRS) are currently silent on how the entity receiving a business under common control should account for the transaction.

Keywords: accounting; tax efficiency; financial reporting; International Financial Reporting Standards (IFRS) (search for similar items in EconPapers)
JEL-codes: H21 H25 M4 (search for similar items in EconPapers)
Date: 2014
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