# Commission Regulation (EC) No 495/2009 of 3 June 2009 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard (IFRS) 3 (Text with EEA relevance) (revoked) EU Regulation No 495/2009 · adopted 3 June 2009 Commission Regulation (EC) No 495/2009 of 3 June 2009 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard (IFRS) 3 (Text with EEA relevance) ## Introductory text Commission Regulation (EC) No 495/2009 of 3 June 2009 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard (IFRS) 3 (Text with EEA relevance) (revoked) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## INTERNATIONAL FINANCIAL REPORTING STANDARD 3 Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## OBJECTIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 1 The objective of this IFRS is to improve the relevance, reliability and comparability of the information that a reporting entity provides in its financial statements about a business combination and its effects. To accomplish that, this IFRS establishes principles and requirements for how the acquirer: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2 This IFRS applies to a transaction or other event that meets the definition of a business combination. This IFRS does not apply to: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## IDENTIFYING A BUSINESS COMBINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## THE ACQUISITION METHOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5 Applying the acquisition method requires: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Identifying the acquirer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Determining the acquisition date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Recognition principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Recognition conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Classifying or designating identifiable assets acquired and liabilities assumed in a business combination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 16 In some situations, IFRSs provide for different accounting depending on how an entity classifies or designates a particular asset or liability. Examples of classifications or designations that the acquirer shall make on the basis of the pertinent conditions as they exist at the acquisition date include but are not limited to: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 17 This IFRS provides two exceptions to the principle in paragraph 15: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Measurement principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Exceptions to the recognition or measurement principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 21 This IFRS provides limited exceptions to its recognition and measurement principles. Paragraphs 22–31 specify both the particular items for which exceptions are provided and the nature of those exceptions. The acquirer shall account for those items by applying the requirements in paragraphs 22–31, which will result in some items being: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Exception to the recognition principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 22 IAS 37 Provisions, Contingent Liabilities and Contingent Assets defines a contingent liability as: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Exceptions to both the recognition and measurement principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Indemnification assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Exceptions to the measurement principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Reacquired rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Share-based payment awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Recognising and measuring goodwill or a gain from a bargain purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 32 The acquirer shall recognise goodwill as of the acquisition date measured as the excess of (a) over (b) below: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Bargain purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 36 Before recognising a gain on a bargain purchase, the acquirer shall reassess whether it has correctly identified all of the assets acquired and all of the liabilities assumed and shall recognise any additional assets or liabilities that are identified in that review. The acquirer shall then review the procedures used to measure the amounts this IFRS requires to be recognised at the acquisition date for all of the following: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Consideration transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Additional guidance for applying the acquisition method to particular types of business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## A business combination achieved in stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## A business combination achieved without the transfer of consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 43 An acquirer sometimes obtains control of an acquiree without transferring consideration. The acquisition method of accounting for a business combination applies to those combinations. Such circumstances include: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Measurement period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 46 The measurement period is the period after the acquisition date during which the acquirer may adjust the provisional amounts recognised for a business combination. The measurement period provides the acquirer with a reasonable time to obtain the information necessary to identify and measure the following as of the acquisition date in accordance with the requirements of this IFRS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Determining what is part of the business combination transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 52 A transaction entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity, rather than primarily for the benefit of the acquiree (or its former owners) before the combination, is likely to be a separate transaction. The following are examples of separate transactions that are not to be included in applying the acquisition method: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Acquisition-related costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## SUBSEQUENT MEASUREMENT AND ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 54 In general, an acquirer shall subsequently measure and account for assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination in accordance with other applicable IFRSs for those items, depending on their nature. However, this IFRS provides guidance on subsequently measuring and accounting for the following assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Reacquired rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 56 After initial recognition and until the liability is settled, cancelled or expires, the acquirer shall measure a contingent liability recognised in a business combination at the higher of: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Indemnification assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 58 Some changes in the fair value of contingent consideration that the acquirer recognises after the acquisition date may be the result of additional information that the acquirer obtained after that date about facts and circumstances that existed at the acquisition date. Such changes are measurement period adjustments in accordance with paragraphs 45–49. However, changes resulting from events after the acquisition date, such as meeting an earnings target, reaching a specified share price or reaching a milestone on a research and development project, are not measurement period adjustments. The acquirer shall account for changes in the fair value of contingent consideration that are not measurement period adjustments as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 59 The acquirer shall disclose information that enables users of its financial statements to evaluate the nature and financial effect of a business combination that occurs either: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## EFFECTIVE DATE AND TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Effective date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## WITHDRAWAL OF IFRS 3 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## A Defined terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## B Application guidance This appendix is an integral part of the IFRS. BUSINESS COMBINATIONS OF ENTITIES UNDER COMMON CONTROL (APPLICATION OF PARAGRAPH 2(c)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDENTIFYING A BUSINESS COMBINATION (APPLICATION OF PARAGRAPH 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5 This IFRS defines a business combination as a transaction or other event in which an acquirer obtains control of one or more businesses. An acquirer might obtain control of an acquiree in a variety of ways, for example: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6 A business combination may be structured in a variety of ways for legal, taxation or other reasons, which include but are not limited to: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFINITION OF A BUSINESS (APPLICATION OF PARAGRAPH 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7 A business consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set to qualify as a business. The three elements of a business are defined as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10 An integrated set of activities and assets in the development stage might not have outputs. If not, the acquirer should consider other factors to determine whether the set is a business. Those factors include, but are not limited to, whether the set: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IDENTIFYING THE ACQUIRER (APPLICATION OF PARAGRAPHS 6 AND 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B15 In a business combination effected primarily by exchanging equity interests, the acquirer is usually the entity that issues its equity interests. However, in some business combinations, commonly called ‘reverse acquisitions’ the issuing entity is the acquiree. Paragraphs B19–B27 provide guidance on accounting for reverse acquisitions. Other pertinent facts and circumstances shall also be considered in identifying the acquirer in a business combination effected by exchanging equity interests, including: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . REVERSE ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19 A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes on the basis of the guidance in paragraphs B13–B18. The entity whose equity interests are acquired (the legal acquiree) must be the acquirer for accounting purposes for the transaction to be considered a reverse acquisition. For example, reverse acquisitions sometimes occur when a private operating entity wants to become a public entity but does not want to register its equity shares. To accomplish that, the private entity will arrange for a public entity to acquire its equity interests in exchange for the equity interests of the public entity. In this example, the public entity is the legal acquirer because it issued its equity interests, and the private entity is the legal acquiree because its equity interests were acquired. However, application of the guidance in paragraphs B13–B18 results in identifying: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Measuring the consideration transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preparation and presentation of consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22 Because the consolidated financial statements represent the continuation of the financial statements of the legal subsidiary except for its capital structure, the consolidated financial statements reflect: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26 In calculating the weighted average number of ordinary shares outstanding (the denominator of the earnings per share calculation) during the period in which the reverse acquisition occurs: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27 The basic earnings per share for each comparative period before the acquisition date presented in the consolidated financial statements following a reverse acquisition shall be calculated by dividing: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RECOGNISING PARTICULAR ASSETS ACQUIRED AND LIABILITIES ASSUMED (APPLICATION OF PARAGRAPHS 10–13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B32 An intangible asset that meets the contractual-legal criterion is identifiable even if the asset is not transferable or separable from the acquiree or from other rights and obligations. For example: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B34 An intangible asset that is not individually separable from the acquiree or combined entity meets the separability criterion if it is separable in combination with a related contract, identifiable asset or liability. For example: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reacquired rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assembled workforce and other items that are not identifiable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MEASURING THE FAIR VALUE OF PARTICULAR IDENTIFIABLE ASSETS AND A NON-CONTROLLING INTEREST IN AN ACQUIREE (APPLICATION OF PARAGRAPHS 18 AND 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets with uncertain cash flows (valuation allowances) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets subject to operating leases in which the acquiree is the lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets that the acquirer intends not to use or to use in a way that is different from the way other market participants would use them . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-controlling interest in an acquiree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MEASURING GOODWILL OR A GAIN FROM A BARGAIN PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Measuring the acquisition-date fair value of the acquirer’s interest in the acquiree using valuation techniques (application of paragraph 33) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Special considerations in applying the acquisition method to combinations of mutual entities (application of paragraph 33) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DETERMINING WHAT IS PART OF THE BUSINESS COMBINATION TRANSACTION (APPLICATION OF PARAGRAPHS 51 AND 52) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B50 The acquirer should consider the following factors, which are neither mutually exclusive nor individually conclusive, to determine whether a transaction is part of the exchange for the acquiree or whether the transaction is separate from the business combination: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effective settlement of a pre-existing relationship between the acquirer and acquiree in a business combination (application of paragraph 52(a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B52 If the business combination in effect settles a pre-existing relationship, the acquirer recognises a gain or loss, measured as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arrangements for contingent payments to employees or selling shareholders (application of paragraph 52(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B55 If it is not clear whether an arrangement for payments to employees or selling shareholders is part of the exchange for the acquiree or is a transaction separate from the business combination, the acquirer should consider the following indicators: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquirer share-based payment awards exchanged for awards held by the acquiree’s employees (application of paragraph 52(b)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B56 An acquirer may exchange its share-based payment awards (replacement awards) for awards held by employees of the acquiree. Exchanges of share options or other share-based payment awards in conjunction with a business combination are accounted for as modifications of share-based payment awards in accordance with IFRS 2 Share-based Payment. If the acquirer is obliged to replace the acquiree awards, either all or a portion of the market-based measure of the acquirer’s replacement awards shall be included in measuring the consideration transferred in the business combination. The acquirer is obliged to replace the acquiree awards if the acquiree or its employees have the ability to enforce replacement. For example, for the purposes of applying this requirement, the acquirer is obliged to replace the acquiree’s awards if replacement is required by: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OTHER IFRSS THAT PROVIDE GUIDANCE ON SUBSEQUENT MEASUREMENT AND ACCOUNTING (APPLICATION OF PARAGRAPH 54) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B63 Examples of other IFRSs that provide guidance on subsequently measuring and accounting for assets acquired and liabilities assumed or incurred in a business combination include: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DISCLOSURES (APPLICATION OF PARAGRAPHS 59 AND 61) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B64 To meet the objective in paragraph 59, the acquirer shall disclose the following information for each business combination that occurs during the reporting period: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B67 To meet the objective in paragraph 61, the acquirer shall disclose the following information for each material business combination or in the aggregate for individually immaterial business combinations that are material collectively: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TRANSITIONAL PROVISIONS FOR BUSINESS COMBINATIONS INVOLVING ONLY MUTUAL ENTITIES OR BY CONTRACT ALONE (APPLICATION OF PARAGRAPH 66) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B69 The requirement to apply this IFRS prospectively has the following effect for a business combination involving only mutual entities or by contract alone if the acquisition date for that business combination is before the application of this IFRS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## C Amendments to other IFRSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFRS 1 FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C1 IFRS 1 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFRS 2 SHARE-BASED PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C2 IFRS 2 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFRS 7 FINANCIAL INSTRUMENTS: DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C3 IFRS 7 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 12 INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C4 IAS 12 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 16 PROPERTY, PLANT AND EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C5 In IAS 16 paragraph 44 is amended as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 28 INVESTMENTS IN ASSOCIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C6 In IAS 28 paragraph 23 is amended as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 32 FINANCIAL INSTRUMENTS: PRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C7 IAS 32 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 33 EARNINGS PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C8 In IAS 33 paragraph 22 is amended as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 34 INTERIM FINANCIAL REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C9 IAS 34 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 36 IMPAIRMENT OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C10 IAS 36 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 37 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C11 In IAS 37 paragraph 5 is amended as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 38 INTANGIBLE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C12 IAS 38 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IAS 39 FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C13 IAS 39 is amended as described below. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFRIC 9 REASSESSMENT OF EMBEDDED DERIVATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C14 Paragraph 5 of IFRIC 9 is footnoted as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- Source: https://www.legislation.gov.uk/eur/2009/495 (the official version) Page: https://openlegislation.uk/eu-regulation-2009-495 Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.