Reverse Acquisitions Within the Scope of IFRS 3 Business Combinations

Article Information
Journal: Business and Economics Research Journal
Title of Article: Reverse Acquisitions Within the Scope of IFRS 3 Business Combinations
Author(s): Olcay Akcin, Ilker Kiymetli Sen
Volume: 9
Number: 1
Year: 2018
Page: 213-233
ISSN: 1309-2448
DOI Number: 10.20409/berj.2018.101
Because of tough competition conditions in global economy, technological developments, changes in consumer preferences, economic crisis, changes in law and number of other reasons, companies choose business combinations in order to reduce the business risks, increase the performance, efficiency and competitive power, expand into new markets and reduce the costs. Companies reporting in accordance with International Financial Reporting Standards apply IFRS 3 Business Combinations while accounting of business combinations. Transactions defined as “Reverse Acquisitions” in the literature are discussed in a separate chapter within the standard. As per the standard, accounting treatments for reverse acquisitions differ in many ways from regular business combinations.The purpose of this study is to explain the theoretical and practical accounting treatment differences between regular business combinations and reverse acquisitions.

Keywords: IFRS, Business Combinations, Reverse Acquisition, Fair Value, Consolidation

JEL Classification: M40, M41, M42 Full Text