Acquisition cost IFRS 3

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Aady001
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Joined: 04 Dec 2020, 17:06

Acquisition cost IFRS 3

Post by Aady001 »

Hello All,
I have the below query and request your views on that.
If a company incurs stamp duty and other registration costs for the transfer of title of assets acquired in a business combination, will it be treated as an acquisition cost?

My initial view is, that it should form part of it, but want to check with a larger group.

Para 53 of IFRS 3
Acquisition‑related costs are costs the acquirer incurs to effect a business
combination. Those costs include finder’s fees; advisory, legal, accounting,
valuation and other professional or consulting fees; general administrative
costs, including the costs of maintaining an internal acquisitions department;
and costs of registering and issuing debt and equity securities. The acquirer
shall account for acquisition-related costs as expenses in the periods in which
the costs are incurred and the services are received, with one exception
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Marek Muc
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Re: Acquisition cost IFRS 3

Post by Marek Muc »

I also think that these costs fall under IFRS 3.53 because they are costs 'the acquirer incurs to effect a business combination'
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Marek Muc
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Re: Acquisition cost IFRS 3

Post by Marek Muc »

PS. is this a business combination where the acquirer and acquiree become one legal entity?
Aady001
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Re: Acquisition cost IFRS 3

Post by Aady001 »

Thanks Marek
Yes, it is, however will the answer if different if its an acquisition of a sub
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Marek Muc
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Re: Acquisition cost IFRS 3

Post by Marek Muc »

the answer would be the same, I was just curious about the nature of these costs :)
Aady001
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Joined: 04 Dec 2020, 17:06

Re: Acquisition cost IFRS 3

Post by Aady001 »

:)
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