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• The formation of a joint venture
 

• The acquisition of assets that do not constitute a business. In such cases, the acquirer indentifies and recognises identifiable assets acquired and liabilities assumed, and allocates the cost of the acquisition to each asset and liability based on their fair values at purchase date. Recognition of goodwill is prohibited in this case.
 

• Entities or businesses under common control

• Identifying the acquirer (one of the entities in a business combination must be identified as the acquirer).
 
 

• Determining the acquisition date, which is the date with the acquirer obtains control of the acquiree.
 
 

• Recognising the identifiable assets (including intangible assets) acquired, the liabilities assumed (must meet the asset and liability definition in the Framework) and any non-controlling interest in the acquiree, measured at fair value as at the acquisition date. Exceptions include:
  • Contingent liabilities must also be recognised at fair value at acquisition date.
   
  
  • Deferred tax assets or liabilities are recognised and measured in accordance with AASB 112 Income Taxes.
   
  
  • Employee benefits arrangements are recognised and measured under AASB 119 Employee Benefits.
   
  
  • Indemnification assets are recognised and measured on the same basis as the indemnified item.
   
  
  • Reacquired rights are measured based on the remaining contractual term.
   
  
  • Share-based payment awards are measured in accordance with AASB 2 Share-based Payment.
   
  
  • Any assets acquired that are classified held-for-sale at acquisition date are measured under AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
   
  
• Recognising and measuring goodwill or a gain from a bargain purchase (prior to recognition of a gain, the acquirer must reassess the application of the acquisition method to ensure all items recognised and measured are appropriate and in accordance with the standard’s requirements. Goodwill is measured as the excess of:
• The aggregate of the consideration transferred, amount of any non-controlling interest and if achieved in stages, the fair value of the acquirer’s previously held equity interest in the acquiree, over
 

• The net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.
 

• Contingent consideration is recognised at the acquisition date fair value as part of the total consideration transferred in exchange for the acquiree.
 
 

• When a business combination is achieved in stages, the acquirer remeasures its previously held equity interest in the acquiree at its acquisition date fair value, with the gain or loss recognised in profit or loss.
 
 

• An acquirer has one year from the acquisition date (‘the measurement period’) to finalise the business combination accounting. After this time, any adjustments are accounted for as errors under AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
 
 

• Any pre-existing relationship or arrangement between acquirer and acquiree do not form part of the business combination; these are treated as separate transactions accounted for under relevant Australian Accounting Standards.
 
 

• Acquisition costs must be expensed. The only exception is costs to issue debt or equity instruments, which are accounted for under AASB 132 and AASB 139.

• Generally, subsequent measurement of assets acquired, liabilities assumed and equity instruments issued are under relevant Australian Accounting Standards. The exceptions to this are:
­
• Reacquired rights recognised as intangible assets are amortised over the remaining contractual period.
 

• Contingent liabilities are measured at the higher of the amount determined under AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised, less any cumulative amortisation under AASB 118 Revenue.
 

• Indemnification assets are subsequently remeasured at each reporting date on the same basis as the indemnified asset or liability. For an indemnification asset not subsequently measured at fair value, management assesses the collectability of the indemnification asset.
 

• Changes in the fair value of contingent consideration due to facts and circumstance existing at acquisition date are adjusted for during the measurement period. Changes in fair value resulting from other events (such as meeting an earnings target) are accounted for as follows:
• If it is equity, it cannot be remeasured and subsequent settlement is accounted for in equity.
 

• If it is an asset or liability that is a financial instrument under AASB 139, it is accounted for at fair value through profit or loss.
 

• If it is not a financial instrument under AASB 139, it is accounted for under AASB 137 or another appropriate standard.

• For each business combination during the reporting period:
• Name and description of acquiree
 

• Acquisition date
 

• Percentage of voting equity instruments acquired
 

• Reasons for the business combination and description of how the acquirer obtained control of acquiree
 

• A qualitative description of factors contributing to goodwill
 

• The acquisition date fair value of the total consideration transferred and of each major class of consideration
 

• Certain information about contingent consideration, indemnification assets and acquired receivables
 

• Amounts recognised at acquisition date for each major class of assets and liabilities
 

• Certain information about contingent liabilities
 

• Amount of goodwill deductible for tax purposes
 

• Certain other information including pre-existing transactions, acquisition costs and bargain purchases
 

• For business combinations effected after reporting date but before the financial report is issued, the same as above unless it is impracticable. If impracticable, disclose this and reason why.
 
 

• Various other disclosures also required, including a reconciliation of goodwill.

• Reverse acquisitions
 

• Identifying intangible assets
 

• Bargain purchase
 

• Measurement period
 

• Determining what is part of the business combination transaction
 

• Disclosure requirements.