Sept 2018 exam paper q 1 part B

Hi sir,
“The International Accounting Standards Board has sought to give greater clarity to the definition of a business since the definition has proven difficult to apply in practice. Consequently, an exposure draft has been issued so that no business acquisition occurs where substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. This is sometimes referred to as a screening test. The fair value of the gross assets acquired includes the fair value of any acquired input, contract, process, workforce and any other intangible asset which is not identifiable. In the case of Banana, they are not intending to use the services of the management company and are not looking to take on any of the employees. It is unclear therefore as to the extent of ‘know how’ from research activities which would be obtainable. Research activities appear to be at a very early stage and, whilst in substance are very different in nature to the licence itself and would be treated as separate assets, are likely to be of relatively low value. It is perfectly plausible that substantially all of the fair value is concentrated in the licence itself and the acquisition would not be treated as a business combination. Should it be determined that the research activities obtainable are of sufficient value so that not all the fair value is concentrated in a single asset, the acquisition would be treated as a business combination since the activities and processes are substantive”

I didnt understand the main points from this part. Could u plz clarify the idea/knowldge here in simple way.

Thanks