# The Friendly Societies (Accounts and Related Provisions) Regulations 1994, Paragraph 8: Acquisition accounting

Extent: E+W+S+N.I.

(1) The acquisition method of accounting is as follows.
(2) The identifiable assets and liabilities of the body corporate acquired must be included in the consolidated balance sheet at their fair values as at the date of acquisition.
(3) In this paragraph the “identifiable” assets or liabilities of the body corporate acquired means the assets or liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the body corporate.
(4) The income and expenditure of the body corporate acquired must be brought into the annual accounts of a group accounts society only as from the date of the acquisition.
(5) There must be set off against the acquisition cost of the interest in the shares of the body corporate held by the society and its subsidiaries, the interest of the society and its subsidiaries in the adjusted capital and reserves of the body corporate acquired, and for this purpose:
“the acquisition cost” means the amount of any cash consideration and the fair value of any other consideration, together with such amount (if any) in respect of fees and other expenses of the acquisition as the society may determine; and
“the adjusted capital and reserves” of the body corporate acquired means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the body corporate to fair value as at that date.
(6) The resulting amount must be treated, if positive, as goodwill, and if negative as a negative consolidation difference.

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Source: https://www.legislation.gov.uk/uksi/1994/1983/schedule/3/paragraph/8 (the official version)
Page: https://openlegislation.uk/friendly-societies-accounts-and-related-provisions-regulations-1994/schedule-3/paragraph-8
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.