Mfrs 3

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MFRS 3

Malaysian Financial Reporting Standard 3

Business Combinations
This version includes amendments resulting from MFRSs with effective dates no later than 1 January 2012.

Amendments with an effective date later than 1 January 2012
MFRS 3 has been amended by:
 MFRS 9 Financial Instruments*
(IFRS 9 Financial Instruments issued by IASB in November 2009)  MFRS 9 Financial Instruments*
(IFRS 9 Financial Instruments issued by IASB in October 2010)  MFRS 10 Consolidated Financial Statements*
 MFRS 13 Fair Value Measurement*
Those amendments have an effective date after 1 January 2012 and are therefore not included in this edition.
*

effective date 1 January 2013

129

MFRS 3

CONTENTS
paragraphs
Preface
INTRODUCTION

IN1–IN13

MALAYSIAN FINANCIAL REPORTING STANDARD 3
BUSINESS COMBINATIONS
OBJECTIVE

1

SCOPE

2

IDENTIFYING A BUSINESS COMBINATION

3

THE ACQUISITION METHOD

4–53

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

10–31

Recognition principle

10–17

Recognition conditions

11–14

Classifying or designating identifiable assets acquired and
liabilities assumed in a business combination

15–17

Measurement principle

18–20

Exceptions to the recognition or measurement principles

21–31

Exception to the recognition principle

22–23

Contingent liabilities

22–23

Exceptions to both the recognition and measurement principles Income taxes

24–28
24–25

Employee benefits

26

Indemnification assets

27–28

Exceptions to the measurement principle

29–31

Reacquired rights

29

Share-based payment transactions

30

Assets held for sale

31

Recognising and measuring goodwill or a gain from a bargain
purchase
Bargain purchases

130

32–40
34–36

©

IFRS Foundation

MFRS 3

Consideration transferred

37–40

Contingent consideration

39–40

Additional guidance for applying the acquisition method to
particular types of business combinations

41–44

A business combination achieved in stages

41–42

A business combination achieved without the transfer of
consideration

43–44

Measurement period

45–50

Determining what is part of the business combination
transaction

51–53

Acquisition-related costs

53

SUBSEQUENT MEASUREMENT AND ACCOUNTING

54–58

Reacquired rights

55

Contingent liabilities

56

Indemnification assets

57

Contingent consideration

58

DISCLOSURES

59–63

EFFECTIVE DATE AND TRANSITION

64–67

Effective date

64–64C

Transition

65–67

Income taxes

67

WITHDRAWAL OF IFRS 3 (2004)

68

APPENDICES:
A

Defined terms

B

Application guidance

C

Amendments to other MFRSs

©

IFRS Foundation

131

MFRS 3

Malaysian Financial Reporting Standard 3 Business Combinations (MFRS 3) is set out in paragraphs 1–68 and Appendices A-C. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A are in italics the first time they appear in the MFRS. Definitions of other terms are given in the Glossary for Malaysian Financial Reporting Standards. MFRS 3 should be read in the context of its objective and the Basis for Conclusions, the Foreword to Financial Reporting Standards and the Conceptual Framework for Financial Reporting. MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.

132

©

IFRS Foundation

MFRS 3

Preface
The Malaysian Accounting Standards Board (MASB) is implementing its policy of convergence through adopting International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB)...
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