Business combinations are accounted for using the acquisition method: the acquirer is identified, the acquisition date determined, the assets acquired and liabilities assumed measured at fair value, and goodwill or a gain on a bargain purchase calculated.
Source: TFRS 3
Related terms
GoodwillThe excess of the consideration paid in a business combination over the fair value of the acquired business's identifiable net assets.Purchase price allocation (PPA)Allocating the consideration paid in a business combination to the identifiable assets acquired and liabilities assumed at their fair values, with the remainder determined as goodwill.Mergers and acquisitions (M&A)The general term for mergers of companies and for one company acquiring or disposing of another company or business line.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Amortised costThe amount at which a financial asset or liability is measured at initial recognition, minus principal repayments, plus cumulative amortisation calculated using the effective interest method.AssociateAn entity over which the investor has significant influence but not control or joint control.
Last updated: October 22, 2026 · This definition is for general information only.