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Need help with my writing homework on Accounting for Acquisitions. Write a 2000 word paper answering;
Need help with my writing homework on Accounting for Acquisitions. Write a 2000 word paper answering; This paper aims to discuss this study, IFRS 3 and how the former may affect the implementation of the latter.
Prior to 2001, an IFRS on business combinations was just part of a project carried out by the then International Accounting Standards Council or IASC. In July 2001, the IASB took up the project on its agenda (Deloitte, 2010). The first exposure draft for this IFRS was issued in December of 2002. On March 31, 2004, IFRS 3 formally superseded International Accounting Standards (IAS) 22 (also titled Business Combinations). The then-new IFRS 3 took effect in April of 2004. By June 2005, an exposure draft to the proposed amendments on this standard was issued. Finally, in January 2008, a revised IFRS 3 was issued. The revised IFRS 3 took effect on July 1, 2009. The IASB made the revisions in line with its ongoing efforts to converge IFRS with the U. S. Generally Accepted Accounting Principles or US GAAP.
The objective of IFRS 3 is “to enhance the relevance, reliability, and comparability of the information that a reporting entity provides in its financial statements about a business combination and its effects” (IFRS 3 Business Combinations, 2009). Based on the summary of IFRS 3 provided by Deloitte (2010) in its IAS Plus website, this standard requires a business combination to be accounted for using the acquisition method. It sets down the guidelines on how the entity can calculate the acquisition cost, even if the actual acquisition will require a couple of steps up to the final settlement of the transactions. It also explains the principles and guidelines behind the recognition and measurement of assets and liabilities acquired during the combination. IFRS 3 pays particular attention to how the acquirer can account for any intangible assets.