Business transactions can take various forms, whether they are in form of capital or asset acquisitions. From an IFRS perspective, the actual substance of the transaction is critical for the chosen accounting treatment, whereas in Czech regulations, accounting treatment is significantly influenced by the legal substance of the transaction. IFRS 3 Business Combinations applies only to the accounting for a transaction involving a 'business', i.e. a transaction that meets the definition o... zobrazit celý abstraktBusiness transactions can take various forms, whether they are in form of capital or asset acquisitions. From an IFRS perspective, the actual substance of the transaction is critical for the chosen accounting treatment, whereas in Czech regulations, accounting treatment is significantly influenced by the legal substance of the transaction. IFRS 3 Business Combinations applies only to the accounting for a transaction involving a 'business', i.e. a transaction that meets the definition of a business combination defined by the standard. When assessing the transaction in question, it is therefore always essential to analyze the substance of the transaction, as the accounting treatment of business combinations is fundamentally different from other transactions (the subject matter of which is, for example, only 'assets'). To simplify this analysis, IFRS 3 now provides the option to use a voluntary concentration test in addition to the traditional decision-making process which will help the acquirer to decide more quickly whether the transaction in question, which may be considered to be a business combination at first, is essentially a mere acquisition of assets. |