09-29-2003, 06:42 AM
Well, Pervez,
I was actually enjoying the discussion b/w u and meer,(also researching on the topic behind the scene),
Well pervez, the issue raised by irfan is quite confusing, If u go to IAS 22, it defines only two types of business combinations, i.e. Acquisitions and Uniting of Intersts,
as Uniting of interest is not the case here so i ll not discuss,
well, if we go to IAS 22 para 8, it defines, "Business combinition obtaining control over the net assets and operations of another enterprise."(in short)
I agree with meer that the definition of "net assets" is not clearly written in IAS, but in general form Net assets = Total Assets Less total outsider's liabilities, in other words, Shareholder's equity.
Now if we move on to the Acquisitions, para 10, says, "Control over the other combining enterprise, therby enabling an acquirer to be identified. and 'Control' is presumed to be obtained wehn one of the combining enterprises acquires more than one half of the 'voting right' of the other combining enterprise."
As I think, the confusion of meer starts from here, in case of Partial acquition of assets, it can be control over the operations, but it cant be one half voting right.
and if u look at the disclosure requirements of IAS 22 for acquisitons, the first requirement for aquisition is disclosure of the percentage of voting shares acquired.{para 87 (a)}
Dont you think IAS is silent in the situation laid down by meer, as far as the client is concerned, in Pakistan we have to situations, which is being faced by meer, at every client even if it is a multi national,
and Pervez and Meer, I would like to tell you that matter raised by meer, is already a hot issue in FASB, following is the link of Minutes of Board Meeting of FASB held on Feb 26, 2003, in which there have been discussion on purchase method business acquition. So Irfan meer if your client doesnt treat it "Acquisition" then he is taking the advantange of Silence of IAS 22 on matter laid down by you.
http//www.fasb.org/board_meeting_minutes/02-26-03_purchmethod.pdf
you must have acrobat reader installed on your computer to view that.
S M R
I was actually enjoying the discussion b/w u and meer,(also researching on the topic behind the scene),
Well pervez, the issue raised by irfan is quite confusing, If u go to IAS 22, it defines only two types of business combinations, i.e. Acquisitions and Uniting of Intersts,
as Uniting of interest is not the case here so i ll not discuss,
well, if we go to IAS 22 para 8, it defines, "Business combinition obtaining control over the net assets and operations of another enterprise."(in short)
I agree with meer that the definition of "net assets" is not clearly written in IAS, but in general form Net assets = Total Assets Less total outsider's liabilities, in other words, Shareholder's equity.
Now if we move on to the Acquisitions, para 10, says, "Control over the other combining enterprise, therby enabling an acquirer to be identified. and 'Control' is presumed to be obtained wehn one of the combining enterprises acquires more than one half of the 'voting right' of the other combining enterprise."
As I think, the confusion of meer starts from here, in case of Partial acquition of assets, it can be control over the operations, but it cant be one half voting right.
and if u look at the disclosure requirements of IAS 22 for acquisitons, the first requirement for aquisition is disclosure of the percentage of voting shares acquired.{para 87 (a)}
Dont you think IAS is silent in the situation laid down by meer, as far as the client is concerned, in Pakistan we have to situations, which is being faced by meer, at every client even if it is a multi national,
and Pervez and Meer, I would like to tell you that matter raised by meer, is already a hot issue in FASB, following is the link of Minutes of Board Meeting of FASB held on Feb 26, 2003, in which there have been discussion on purchase method business acquition. So Irfan meer if your client doesnt treat it "Acquisition" then he is taking the advantange of Silence of IAS 22 on matter laid down by you.
http//www.fasb.org/board_meeting_minutes/02-26-03_purchmethod.pdf
you must have acrobat reader installed on your computer to view that.
S M R
