Q2a – December 2015, Chemclean

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November 22, 2016 at 10:59 pm #350809
nari
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Hello
Can you please explain why the last line of the answer in part 2a mentioned “Here, the acquisition of an interest in Conew is an asset acquisition and should be accounted for under IAS 38 because Conew does not meet the definition of a business.”
Also I did not come across a definition for a business in the OT Notes.
Links:
Question:
https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p2/P2%20INT/d15_hybrid_p2int_q.pdf
Answer:
https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/p2/P2%20INT/p2int-2015-dec-a.pdf
November 24, 2016 at 9:33 pm #351279
P2-D2
Keymaster
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Hi,
If you want a definition of a business then you can find it in IFRS 3.
Here in Conew there is only an asset, the Yacton chemical compound. So even though it looks like a company/business legally, in substance it is just the acquisition of an asset.
Thanks
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