Merger accounting: Difference between revisions
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* [[Merger]] | * [[Merger]] | ||
* [[Merger reserve]] | * [[Merger reserve]] | ||
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Revision as of 16:26, 22 November 2014
Merger accounting regards two or more parties as combining their interests on an equal footing.
The difference that arises on consolidation does not represent goodwill, but is instead added to (or deducted from) reserves.
Merger accounting is not allowed under the relevant international accounting standard IFRS 3 'Business combinations'.
Under UK domestic GAAP merger accounting is required - but under strictly limited circumstances - under FRS 6 'Acquisitions and Mergers'.
