Accounting For Business Combinations Research Articles

IMPLEMENTASI AKUNTANSI KOMBINASI BISNIS SEBELUM DAN SETELAH ADOPSI IFRS PADA PERUSAHAAN SEKTOR KONSUMSI DI INDONESIA

This study aims to analyze the implementation of business combination accounting before and after the IFRS adoption in Indonesia. This study uses a qualitative method with a content analysis approach. The data used in this study is secondary data, the financial statements of consumption sector companies listed on the Indonesia Stock Exchange from 2009 to 2019 and obtained from www.idx.co.id and www.idnfinancials.com. Using purposive sampling, the sample used in the analysis of this study amounted to 6 companies for 11 years (66 observations). This study concludes that before the IFRS adoption was implemented in Indonesia, some companies implemented the pooling of interest accounting methods for their business combinations. In contrast, other companies used the purchase method, and some companies did not disclose the accounting recording method of their business combination. Besides, several companies do not recognize goodwill, while other companies have recognized and harmonized goodwill under applicable standards. At the beginning of adopting IFRS in Indonesia, all companies that had goodwill had stopped amortizing goodwill and tested the impairment every year. However, some companies still did not fully implement business combination accounting under financial accounting standards. Starting in 2015, all companies have improved their accounting for business combinations, especially in the presentation and measurement of transactions, to be more detailed and following applicable standards.

Heineken's Acquisition of Asia Pacific Breweries: Accounting for Business Combinations and Changes in Ownership Interests

ABSTRACT On July 20, 2012, Heineken, a Dutch brewery offered S$5.125 billion (Singapore dollars; approximately US$4.1 billion) to buy Asia Pacific Breweries Ltd (APB; formerly, Malayan Breweries Limited) from its Singapore-based joint venture partner, Fraser and Neave, Limited. (F&N). At that point, Heineken and F&N had joint control over APB through the joint venture vehicle Asia Pacific Investments Pte Ltd (APIPL). Brewery business under the joint arrangement had moved on quite predictably from the time APB was formed in 1931. However, the calm changed to high drama when Thai Beverage, owned by one of Thailand's tycoons, made a bid for F&N and APB. Heineken was quick to respond by aggressively buying shares of APB, leading to a large control premium being paid in the final offer price. The bidding war was largely motivated by the Dutch and Thai beer giants, each wanting to own the iconic Tiger beer brand that was owned by APB and thus take control of APB's strong market share in the fast-growing market of Asia. The Heineken bid for APB presents an interesting case study regarding the motivations for acquisitions, the nature of control, and accounting for acquisitions. The case also presents rich issues in accounting for changes in ownership interests with and without gain of control.

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Bulgarian Abstract: Понятието „бизнес“ днес се използва широко както в икономическата литература, така и в масовото общуване като смисъла, който се влага в него не винаги е еднозначен.В контекста на счетоводните стандарти във връзка с представянето на сделките по сливане и придобиване категорията „бизнес“ е дефинирана в приложимия стандарт за бизнескомбинациите – МСФО 3. Считаме, че внасянето на яснота в полето на счетоводното регламентиране на една изключително важна категория като бизнескомбинациите е повече от наложително, тъй като вярваме, че разбирането на икономическия смисъл на бизнескомбинациите, чиято есенция е в разбирането на категорията бизнес, е от решаващо значение за тяхното счетоводно регламентиране и последващо представяне във финансовите отчети. Освен това бизнескомбинациите са носител на огромни транзакционни потоци, което прави информацията за тези сделки и тяхното счетоводно представяне изключително важни за бъдещите инвестиционни решения С оглед на изложените в текста аргументи е предложено дефиницията за бизнес да претърпи редакция и да придобие следния вид: „бизнес“ представлява съвкупност от активи и дейности (и поети задължения), които предприятието ръководи и осъществява с цел получаване на възвръщаемост за инвеститорите под различна форма и които в обозримо бъдеще не се предвижда да бъдат прекратени.Последната част от предложената дефиниция считаме, че е особено важна, тъй като има отношение към цялостната концепция за счетоводно отчитане на една бизнескомбинация.English Abstract: One of the most important moments, gives the appearance of the whole topic of business combinations is the determination whether as a result of the business combination, the acquirer obtains control of one or more businesses. We believe that the acquisition of the business and its continuation is the basis for a business such as economic transactions. If the acquirer acquires resources and processes that are not considered business at the date of acquisition, then to that date should not be recognized and the goodwill from the transaction as a separate identifiable asset and any difference that emerges to present itself as gain or loss on the transaction. Adopting this basic thesis believe that the same should be considered and a situation in which the acquirer can identify the date of acquisition business, but does not provide for its continuation.

On the Implications of Fair Value Based Merger Accounting

Accounting for business combinations appeared formally for the first time in statute books in the United States in 1970 when Accounting Principles Board (APB) promulgated Opinion No. 16 (Business Combinations) and Opinion No. 17 (Intangible Assets). The US Financial Accounting Standards Board (FASB hereinafter) subsequently issued SFAS 141(R) and SFAS 160. This paper attempts to analyze merger accounting in the context of the aforesaid standards and related provisions as they stand en presnti underscoring the role therein of fair value accounting and measurements. Additionally, a critical evaluation of the pooling & purchase methods of merger accounting is presented in an effort to explain the relative aversion of accounting bodies to the pooling method. Contextual SFAS, IFRS and Indian standards on business combinations that mandate the use of the acquisition method are also elaborated.

Towards the international convergence of accounting standards: the case of Business Combinations and Goodwill

Accounting for business combinations and for goodwill has profoundly changed during the last ten years both in the US and in Europe, as a consequence of the common effort of the FASB and the IASB towards the international convergence of accounting standards. The Business Combinations project has been the first major project undertaken jointly by the accounting standard setters and it has resulted in the issue of substantially converged accounting standards with some remaining differences. The aim of this paper is to review and comment the evolution and the major changes occurred in accounting for business combinations and for goodwill and their current status in the light of the process of convergence of accounting standards on these crucial economic transactions.

Goodwill and Current Costs in Large Corporate Transactions

This paper analyzes several issues: 1) the efficiency of the new US goodwill rules, particularly within the context of large corporate transactions - Statement no. 141, Accounting for Business Combinations, and Statement no. 142, Accounting for Goodwill and Intangible Assets - 2) the goodwill impairment calculation, 3) potential problems and concerns raised by accounting practitioners and professionals in industry, 4) discretion and mis-statements in application of SFAS 142, 5) Current cost accounting. The series of transactions done by Encompass Services Inc., is used to illustrate various reasons for changes in the disclosure and accounting requirements for Goodwill.

The Information Content of Goodwill-Impairments under FAS 142: Implications for External Analysis and Internal Control

With its standards FAS 141 and 142 the Financial Accounting Standard Board has revolutionized the accounting for business combinations. One of the major changes is the abolishment of goodwill-amortization, which has been replaced by an annual impairment test at the level of a reporting unit. Among other things, this new regulation is intended to improve the information content of goodwill accounting. This paper investigates into the information content of such an impairment from the perspective of external or internal financial analysis. I examine how impairment losses resulting from FAS 142 should be interpreted and treated in the internal and external performance analysis. My analysis shows that an impairment can be due to several reasons, not just to a deteriorating economic performance. In particular, the way the impairment test is conducted according to FAS 142 may even lead to a discrimination of economically viable investment projects..

Valuation of the Components of Purchased Goodwill

This paper examines whether investors distinguish among identifiable components of goodwill for valuation purposes, in the year of acquisition. Similar to Barth, Beaver, and Landsman's [1992] analysis of the value relevance of the components of pension expenses under Statement of Financial Accounting Standards No. 87, we use contemporaneous stock price and returns regressions to examine investors' valuation of the components of goodwill and their amortizations. Although current accounting practice does not require firms to disclose components of goodwillAccounting Principles Board Opinion No. 16: Accountingfor Business Combinations [1970] requires firms to record only the total excess of the purchase price over the fair value of identifiable assets and to amortize this asset over a period not to exceed 40 years-market participants can readily calculate goodwill components from publicly available data. As detailed in section 2, we decompose the difference between the acquisition price and the preacquisition book value of the target firm's assets into four components: (1) the write-up of the target firm's assets to fair market value (WRITEUP), calculated as the difference between

Comparative Effects of Alternative Methods of Accounting for Business Combinations

Comparative Effects of Alternative Methods of Accounting for Business Combinations

Do firms pay to pool?: Some empirical evidence

In 1970 the Accounting Principles Board (APB) issued Opinion No. 16 on accounting for business combinations. It severely restricted the circumstances under which pooling could be used. Prior studies by Gagnon in 1967 and others strongly suggested that acquiring firms preferred to pool to maximize their net income. After APB 16 target firms may have been able to extract a higher price from acquirers in return for their cooperation in pooling. Data were collected for a number of business combinations which took place between 1963 and 1978. Offer premiums were analyzed using regression analysis. Contrary to what was expected, offer premiums were found to be negatively correlated with the amount of the underlying goodwill contained in the target. However, further tests did show that acquirers continued to pool when it would maximize net income.

An Economist Looks at Accounting for Business Combinations

An Economist Looks at Accounting for Business Combinations

A Critical Study of Accounting for Business Combinations.

A Critical Study of Accounting for Business Combinations.