IAS 27

Question 1

methods

Answer 1

1. Purchase the assets and liabilities of the acquiree; or
2. Purchase the shares in an acquiree (Investment in Shares)

Question 2

accounting treatment of purchasing shares

Answer 2

you would now need to prepare consolidated financial
statements in terms of IFRS

Legal issues and costs pre-acquisition will effectively be inherited by the acquirer

Question 3

accounting treatment of purchasing assets and liabilities

Answer 3

assets and liabilities will be directly included on the company’s statement of financial position and there will be no need for complicated consolidations in the future

Legal issues and the legal claims will remain with acquiree and its directors as a legal entity