BCUCC or IFRS 3?

All topics related to IFRS Standards.
Post Reply
RE_FX
Posts: 10
Joined: 20 Aug 2019, 11:16

BCUCC or IFRS 3?

Post by RE_FX »

Hi,

I need to draw the line whether below transaction is a BCUCC or BC:


Before Combination the govt are the controlling shareholders of those SOEs which each of them have a subsidiary

........Government
|.............|.............|
|.............|.............|
SOE A......SOE B........SOE C
|.............|.............|
|.............|.............|
Sub A......Sub B........Sub C

and then the government decided to merge all the subsidiaries into one company and transferred the merged company under SOE A as follow:

........Government
|.............|.............|
|.............|.............|
SOE A......SOE B........SOE C
|
|
Sub ABC (merged)

I don't know whether "transfer" is the correct term for this because the govt decided not to "transfer" the Sub B and Sub C first before merging.

Thank you
User avatar
Marek Muc
Site Admin
Posts: 1710
Joined: 15 Oct 2018, 17:21
Location: Warsaw, Poland

Re: BCUCC or IFRS 3?

Post by Marek Muc »

Government is the ultimate controlling party before and after the business combination, so to me it's clearly a BCUCC. And what is your opinion?
JRSB
Trusted Expert
Posts: 629
Joined: 01 Mar 2020, 01:10
Location: UK

Re: BCUCC or IFRS 3?

Post by JRSB »

whose accounts are you looking at, SOE A?

What is 'SOE'?
Student of IFRS.
RE_FX
Posts: 10
Joined: 20 Aug 2019, 11:16

Re: BCUCC or IFRS 3?

Post by RE_FX »

Marek Muc wrote: 23 Sep 2021, 10:23 Government is the ultimate controlling party before and after the business combination, so to me it's clearly a BCUCC. And what is your opinion?
TBH I couldn't decide whether it should be accounted as business combination on subsidiary level or BCUCC on receiving/transferring company level. From what I understand based on the discussion paper, BCUCC is transferring the subsidiary of a transferring company to the receiving company. However, it didn't mention what if the transferred companies are merging to an existing company under the receiving company and the controlling shareholder is now the receiving company (SOE A).
JRSB wrote: 23 Sep 2021, 10:24 whose accounts are you looking at, SOE A?

What is 'SOE'?
Hi, it's State-owned Enterprise

Yes, I'm trying to understand how do the SOE A accounts all the events. After I'm sure enough this is 100% BCUCC, I will ask few questions about distribution and contribution.
JRSB
Trusted Expert
Posts: 629
Joined: 01 Mar 2020, 01:10
Location: UK

Re: BCUCC or IFRS 3?

Post by JRSB »

I would agree with Marek then although I personally haven't worked with government as the controller in such cases. don't see that it would be any different, although 'government' is a broad word....
Student of IFRS.
Post Reply