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hi, i have read this in workbook but doesnt seems to quite understand this.
can you pls explain in details, with short example if any for the business acq. input,process,output.
and how it was different from asset acq.thank you
If you buy a company that owns assets but is not yet in a position to trade – perhaps they have no licence and you hope to get one in the future, it may be an asset purchase as opposed to a business purchase.
If it’s an asset purchase the accounting is different. There’s a great list of differences if you follow this link:
http://www.ifgroup.us.com/docs/PurchaseAssetsvsPurchaseBiz.pdf
For exam purposes I think the questions are left a bit open-ended – so there isn’t always one right answer!
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