Acquisition-type or merger-type accounting? Further insights on transactions involving businesses governed by the same party(-ies)

Journal title FINANCIAL REPORTING
Author/s Tiziano Onesti, Mario Romano, Marco Taliento
Publishing Year 2016 Issue 2015/2
Language Italian Pages 21 P. 117-137 File size 250 KB
DOI 10.3280/FR2015-002005
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This paper - aiming at encouraging a fruitful debate - intends to highlight the discontinuous evolution of the accounting solutions explored by notable bodies (Efrag-Oic, Iasb, Fasb, Kasb, etc.) with reference to transactions involving businesses under common control. The work finally recompose them in two basic categories (discussing their pros/cons as well), here analyzed: acquisition-type accounting, which emphasizes fair value (emergence of exchange or current amounts) vs. merger-type accounting, linked to historical costs (continuity values approach). The first cluster includes the pure-acquisition and the fresh-start method, whereas the second the predecessor basis and the pooling of interests techniques. The concrete identification of the proper methodology, in this regard, essentially requires the profound understanding of the underlying economics, architecture and key elements of a specific transaction shedding light on the most relevant and reliable information useful to stakeholders.

Keywords: Common control, consolidation, financial reporting, acquisition accounting, fresh start, predecessor basis, pooling of interests, IAS/IFRS

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  • Dialogue with standard setters. Business Combinations under Common Control: Concerns, Criticisms and Strides Raffaele Fiume, Tiziano Onesti, Mauro Romano, Marco Taliento, in FINANCIAL REPORTING 1/2015 pp.107
    DOI: 10.3280/FR2015-001005

Tiziano Onesti, Mario Romano, Marco Taliento, Acquisition-type or merger-type accounting? Further insights on transactions involving businesses governed by the same party(-ies) in "FINANCIAL REPORTING" 2/2015, pp 117-137, DOI: 10.3280/FR2015-002005