Business Combination Series (Part 1 of 3) – Overview & Latest Updates

Businesses often expand by acquisitions and operate through setting up different entities. The group financial statements become important reports that summarize the performance of the groups as single economic entities.

HKFRS 3 (Revised) Business Combinations that provides guidelines on preparing the group financial statements is complex to apply.

Areas to be covered in this seminar:

1. Scope of HKFRS 3 and definition of business
2. Treatment of full/partial goodwill and gain on bargain purchase
3. Determining what is part of the business combination transaction
4. Measurement period adjustments

Business Combination Series (Part 2 of 3) – Step Acquisition

Shareholdings in investees may built up gradually until the holding company achieves ultimate control.  This is referred to as step acquisition.   Increase in shareholdings in investees may or may not lead to the acquisition of subsidiaries. 

Areas to be covered in this seminar:

1. Treatment of step acquisitions
2. Treatment of increases in shareholdings that do not lead to acquisition of subsidiaries
3. Treatment of contingent consideration

Business Combination Series (Part 3 of 3) – Loss of Control

Decrease of shareholdings in subsidiaries may or may not lead to the loss of control in subsidiaries. When control is lost, this has been referred to as 'crossing an accounting boundary' and a gain or loss on disposal is normally calculated.  On the contrary, when control is retained, it is not considered as the disposal of subsidiary. Instead it is accounted for as equity transactions.

Areas to be covered in this seminar:

1. Treatment of loss of control of subsidiaries
2. Treatment of decreases in shareholdings that do not lead to the loss of control of subsidiaries
3. Deemed disposals of subsidiaries

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