Business Combinations

1. Identify the acquirer

2. dertermine the acquisition date

3. recognize and measure the identifiable assets, liabilities and NCI acquired

4. recognize and measure the goodwill or gain from the bargain purchase

• Capitalized Research and Development (IFRS)

• Leases

• Deferred tax

• Financial instruments

• marketing related (trademarks, brands, domains etc)

• customer related (customer list etc)

• artistic related (plays, books, films etc)

• contract based (licensing, royalty etc)

• technology based (computer software, unpatented technology etc)

1. market approach (based on multiples / prices from the market)

2. income approach (NPV earnings attributable, or cost avoiding as a result of owning the asset)

3. cost approach (reproduction / replacement cost adjusted for depreciation / obsolescence)

intangible asset representing future economic benefits arising from assets acquired which are not individually identified and recognized

1. partial goodwill

   (NCI is measured as proportionate share of acquirees net identifiable assets)

2. full goodwill

   (NCI is measured at fair value)

• goodwill -> only impairment

• intangible assets (finite life) -> impairment and amortization

• intangible assets (infinite life) -> only impairment

annual basis for:

• goodwill

• intangible assets with indefinite life

• intangible asset not yet available for use

CGUs are tested for impairment (it’s not to test goodwill / intangibles directly for impairment)

CGU:

• first, reduce the carrying amount allocated to CGU

• then, the other assets in the CGU evenly