Should Merger Accounting be Reconsidered?: A Discussion Based on the Chinese Approach to Accounting for Business Combinations

2008 ◽  
Author(s):  
C. Richard Baker ◽  
Yuri Biondi ◽  
Qiusheng Zhang
Keyword(s):  
Business Combinations

The Realities of Business Combinations

1970 ◽  
Vol 26 (4) ◽  
pp. 28-32
Author(s):  
Herbert C. Knortz
Keyword(s):  
Business Combinations

OBJECTIVES OF FINANCIAL REPORTING, ABORIGINAL COST, AND POOLING OF INTERESTS ACCOUNTING

2012 ◽  
Vol 39 (2) ◽  
pp. 45-80 ◽  
Author(s):  
Hugo Nurnberg
Keyword(s):  
Public Policy ◽  
Financial Reporting ◽  
Information Needs ◽  
Public Utility ◽  
Financial Reports ◽  
Policy Makers ◽  
Business Combinations ◽  
Decision Usefulness ◽  
Rate Base ◽  
Utility Rate

ABSTRACT Through the years, pooling of interest accounting was criticized as contrary to the decision usefulness objective of financial reporting and potentially misleading to stockholders and creditors, the assumed principal users of financial reports. This paper does not dispute those criticisms. It demonstrates, however, that there were some very good reasons for permitting pooling accounting for certain business combinations when the method was developed in the 1940s. At that time, the basic objectives of financial accounting encompassed stewardship and decision usefulness for multiple users, including public utility regulators and public policy makers. Pooling accounting developed in part to satisfy the information needs of public utility regulators who favored aboriginal (original historical) cost to determine the utility rate base; additionally, it was favored by public policy makers who sought lower utility rates (prices) to foster social and economic goals.

Response to FASB Invitation to Comment on Methods of Accounting for Business Combinations: Recommendations of the G4+1 for Achieving Convergence

1999 ◽  
Vol 13 (3) ◽  
pp. 299-303 ◽  
Author(s):  
James M. Wahlen ◽  
James R. Boatsman ◽  
Robert H. Herz ◽  
Ross G. Jennings ◽  
Gregory J. Jonas ◽  
...  
Keyword(s):  
Business Combinations

Heineken's Acquisition of Asia Pacific Breweries: Accounting for Business Combinations and Changes in Ownership Interests

2017 ◽  
Vol 32 (4) ◽  
pp. 101-127 ◽  
Author(s):  
Pearl Tan ◽  
Chu-Yeong Lim
Keyword(s):  
Market Share ◽  
Joint Venture ◽  
Interesting Case ◽  
Asia Pacific ◽  
Joint Control ◽  
Business Combinations ◽  
Final Offer ◽  
Control Premium ◽  
Joint Venture Partner

ABSTRACT On July 20, 2012, Heineken, a Dutch brewery offered S$5.125 billion (Singapore dollars; approximately US$4.1 billion) to buy Asia Pacific Breweries Ltd (APB; formerly, Malayan Breweries Limited) from its Singapore-based joint venture partner, Fraser and Neave, Limited. (F&N). At that point, Heineken and F&N had joint control over APB through the joint venture vehicle Asia Pacific Investments Pte Ltd (APIPL). Brewery business under the joint arrangement had moved on quite predictably from the time APB was formed in 1931. However, the calm changed to high drama when Thai Beverage, owned by one of Thailand's tycoons, made a bid for F&N and APB. Heineken was quick to respond by aggressively buying shares of APB, leading to a large control premium being paid in the final offer price. The bidding war was largely motivated by the Dutch and Thai beer giants, each wanting to own the iconic Tiger beer brand that was owned by APB and thus take control of APB's strong market share in the fast-growing market of Asia. The Heineken bid for APB presents an interesting case study regarding the motivations for acquisitions, the nature of control, and accounting for acquisitions. The case also presents rich issues in accounting for changes in ownership interests with and without gain of control.

scholarly journals The Timing of Goodwill Write-off: Cases of Initial Overpayment

2016 ◽  
Vol 9 (11) ◽  
pp. 65
Author(s):  
Jamaliah Abdul Majid ◽  
Robiah Abu Bakar ◽  
Nor Asma Lode
Keyword(s):  
Annual Reports ◽  
Accounting Choice ◽  
Business Combinations ◽  
Listed Firms ◽  
Goodwill Impairment ◽  
Depth Analysis ◽  
The Future ◽  
Choice Literature ◽  
Acquisition Price

<p>This paper explores types of accounting choice related to reporting goodwill impairment losses, if any, exercised by Malaysian listed firms after an implementation of IFRS 3. The study is carried out through an in-depth analysis of annual reports for fifteen firms over a number of years. The fifteen firms selected are those that have goodwill arising from business combinations in December 2006/7, reported goodwill impairment losses in the current year or the future year(s), and the goodwill represents 50% or more of the acquisition price. Results show that of the fifteen firms examined, eight firms appeared to exercise the accounting choice in the form of opportunistic timing in reporting the impairment losses. The study contributes to the accounting choice literature by providing evidence on the timing of goodwill impairment losses for goodwill that arose from an apparent overpayment made at the time of an acquisition of a subsidiary.</p>

scholarly journals Is There Any Value in the Banks Brand?

2018 ◽  
Vol 13 (12) ◽  
pp. 261
Author(s):  
Emanuel Bagna
Keyword(s):  
Stock Prices ◽  
Banking Sector ◽  
Value Relevance ◽  
Brand Value ◽  
Generation Process ◽  
Business Combinations ◽  
Allocation Process ◽  
Independent Expert ◽  
Brand Values ◽  
A Company

Traditionally the literature show that public brand value estimates (such as the ones published by Interbrand, Brand Finance or Brand Z), in the context of industrial quoted companies, are incorporated in stock prices, implying that brands significantly contributes to the value generation process in a company. No such study was carried out at the level of the banking sector. This could be due to the attribution of a marginal importance of brands, among other intangible assets, in the banking sector, as highlighted by the literature. In more recent years more and more evidences give evidence of the importance of brands in banking sector; it should be noted that: - many banks, as a result of the Purchase Price Allocation process - PPA (pursuant to IFRS 3 Business Combinations) consequent to banking aggregations (mergers or acquisitions), have booked in their financial statements (separate or consolidated) brand values; - reports published by independent parties such as Brand Finance, publishes brand values specifically for the banking sector. The aim of this article is therefore to assess if the brand contributes to the value generation process in the banking sector. To test our hypothesis we run a regression on a European sample between market capitalization of major banks and their brand value published by independent expert Brand Finance from 2008 to 2017, with a classic value relevance analysis. Our results demonstrate that brand contributes to the value generation process in the banking sector.

scholarly journals CORPORATE BUSINESS VALUATION FOR MERGERS AND ACQUISITIONS

2005 ◽  
Vol 9 (3) ◽  
pp. 173-189 ◽  
Author(s):  
Bioye Tajudeen Aluko ◽  
Abdul-Rasheed Amidu
Keyword(s):  
Mergers And Acquisitions ◽  
Structural Changes ◽  
Fair Value ◽  
Prima Facie ◽  
Clear Understanding ◽  
Exploratory Research ◽  
Real Property ◽  
Business Combinations ◽  
Business Entities ◽  
Corporate Business

Business combinations including mergers and acquisitions are important features of corporate structural changes. The Investments Securities Acts (ISA), 1999 charge the Securities and Exchange Commission with the responsibility to review and approve all business combinations in Nigeria. And, real property is an integral factor in many of such strategic business decisions and, need to be set in a business context. This paper, therefore, examines how corporate business entities are and could be valued for mergers and acquisitions through exploratory research. It also explains the relevance of goodwill, marriage value, and fair value concept in corporate business asset valuation. The paper found out inter‐ alia that the value of holding property to the business needs to be measured against the return that the equity could achieve both within the business and elsewhere. It also, prima facie, shows that the role of the valuer is not one of accountant but interpreter of financial and physical information with a clear understanding of the nature of the business under consideration in merger and acquisition.

scholarly journals Effects of business combinations on the competitive environment

2018 ◽  
Vol 5 (2) ◽  
pp. 51 ◽  
Author(s):  
Florentina Moisescu ◽  
Аnа-Mаriа Golomoz
Keyword(s):  
Development Strategy ◽  
Competitive Environment ◽  
Negative Effects ◽  
Business Combinations ◽  
The Development Strategy ◽  
Business Combination

<p>This paper deals with the results of the businesses combinations and the advantages felt in solving the problems of certain entities, the extension on other markets or obtaining increased quotas on the market. Also, businesses combinations can generate disadvantages regarding the access to credits or negative effects on the salary. A business combination is based on taking risks an has advantages as well as disadvantages, on both the short and the long term, while the decision of making it has in view the development strategy of the organisation. The aim of the paper is to analyze and balance the benefits and disadvantages of business combinations. It is questioned the need to use this method and its use only for the advantages obtained despite the existing disadvantages.</p>

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