Accounting for reverse acquisitions in separate financial statements

[DSD]

Hi,
A pretty niche one, but we have a parent company made up of a number of distinct CGUs/business lines, that recently sold one of its 'businesses' (trade and assets deal, with all relevant inputs and processes) to a subsidiary that had been set-up with the aim of taking on this part of the business.

The subsidiary itself was very small and had hitherto only been generating interest revenue from cash held in the bank in advanced of this transaction (which to my mind also qualifies it as a business, since we had the relevant inputs (cash), processes (resource management), and outputs (interest generated) to constitute a business).

Given the relative size of the businesses (new subsidiary was very small compared to the business line it was absorbing) and given that the transaction was effectively done in exchange for share capital in the subsidiary, my thinking is that this is a reverse acquisition, with the subsidiary as the acquiree - in which case, I was trying to understand how to present these in standalone financial statements.

The guidance I've seen focusses on how to deal with consolidated financial statements, but I'm trying to understand how these would appear in separate FSs? Even if they're considered the acquiree, presumably in their own financial statements, the subsidiary would be recognising the increased share capital, the assets transferred, and potentially any goodwill for the value of consideration over the identifiable assets/liabilities acquired?

Any help would be greatly appreciated!

[Marek Muc]

It's a business combination under common control, so you have lots of flexibility in how you account for this transaction: https://ifrscommunity.com/knowledge-bas ... on-control

[DSD]

Thank you, Marek - I appreciate the response!