ACCA SBR ^UK Syllabus D. Financial Statements of Groups entities - Has a Business Combination Occurred? - Notes ^{1 / 34}

Is a transaction a business combination?

IFRS 3 provides this guidance:

1. Can be by: 

   Giving Cash
   Taking on Liabilities
   Issuing Shares, or 

   by not issuing consideration at all (i.e. by contract alone)

2. Structures can be: 

   eg.
   An entity becoming a subsidiary of another
   An entity transfers its Net assets to another or to a new entity

3. There must be an acquisition of a business

   A business generally has 3 elements

   1. Inputs 
   An economic resource (e.g. PPE) that creates outputs when one or more processes are applied to it 

   2. Process
   A system when applied to inputs, creates outputs

   3. Output
   The result of inputs and processes