- This topic has 2 replies, 2 voices, and was last updated 14 years ago by
.
- Posts
I was reading ifrs 3 the other day and under consideration transferred it was written that assets and liabilities transferred should be measured at fair value at acquisition date. My question is how are liabilities transferred in a business combinarion? This is confusing me . Please elaborate with an example.
Thank you.
Hi
If the “consideration transferred” is relating to the assets / liabilities being transferred from subsidiary to parent ( acquiree to acquirer ), then it’s simply referring to “fair value of net assets at date of acquisition”
Difficult to see how liabilities can be transferred from acquirer to acquiree – unless this refers to the possibility that, as part of the purchase consideration, the acquiring parent company is issuing debt instruments.
Or maybe, if we are buying from an individual majority shareholder, I suppose we could say “Here is $400,000 assets, but you must also take over this $150,000 that we owe to a third party” That would then give us a net consideration of $250,000. A strange situation! But I can think of nothing else.
- You must be logged in to reply to this topic.