Business combination
A business combination is a transaction or other event in which an acquirer obtains control of one or more businesses. The acquisition method generally identifies the acquirer and acquisition date, recognises and measures identifiable assets and liabilities and determines goodwill or a bargain purchase, subject to IFRS 3 requirements.
Worked example
A buyer acquires control of an operating business; the auditor evaluates the acquisition date, identifiable net assets, consideration and goodwill.
Common mistake
Do not assume every acquisition of assets is a business combination or omit non-controlling interests and previously held interests when calculating goodwill.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |