Reverse acquisition and its influence on the financial statement of entity

Agnieszka Wójcik

Abstract


The goal of this article is to present as follows: − a category of reverse acquisition on the background of accountancy, − influence of reverse acquisition on shape and structure of financial statement of entity that was created as a result of reverse acquisition transaction, − the way of operating of reverse acquisition in business practice. The reverse acquisition is a term that is used only in the field of International Accounting Standards and Generally Accepted Accounting Principles. It concerns a situation when domination of acquirer’s profits over acquiree’s profits is not obvious. Classification of acquisition transaction as a reverse acquisition transaction gives very significant accounting results and causes big change in the financial statement prepared according to the International Accounting Standards against one prepared according to the National Accounting Standards. That is especially impartment during goodwill calculation. On the other hand, this distinction is unimportant for the law site of the transaction. The correct recognition of the nature of acquisition transaction is quite methodologically difficult, so it may need an error correction after transaction closing.

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DOI: http://dx.doi.org/10.17951/sil.2014.21.0.239
Data publikacji: 2015-04-18 11:34:37
Data złożenia artykułu: 2015-04-14 19:03:07

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