The guidance in IFRS 10 Consolidated Financial Statements is used to identify an acquirer in a business combination, i.e. the entity that obtains 'control' of the acquiree. [IFRS 3.7]
If the guidance in IFRS 10 does not clearly indicate which of the combining entities is an acquirer, IFRS 3 provides additional guidance which is then considered:
The acquirer is usually the entity that transfers cash or other assets where the business combination is effected in this manner [IFRS 3.B14] The acquirer is usually, but not always, the entity issuing equity interests where the transaction is effected in this manner, however the entity also considers other pertinent facts and circumstances including: [IFRS 3.B15]
relative voting rights in the combined entity after the business combination the existence of any large minority interest if no other owner or group of owners has a significant voting interest the composition of the governing body and senior management of the combined entity the terms on which equity interests are exchanged
The acquirer is usually the entity with the largest relative size (assets, revenues or profit) [IFRS 3.B16] For business combinations involving multiple entities, consideration is given to the entity initiating the combination, and the relative sizes of the combining entities. [IFRS 3.B17]
Acquisition date
An acquirer considers all pertinent facts and circumstances when determining the acquisition date, i.e. the date on which it obtains control of the acquiree. The acquisition date may be a date that is earlier or later than the closing date. [IFRS 3.8-9]
IFRS 3 does not provide detailed guidance on the determination of the acquisition date and the date identified should reflect all relevant facts and circumstances. Considerations might include, among others, the date a public offer becomes unconditional (with a controlling interest acquired), when the acquirer can effect change in the board of directors of the acquiree, the date of acceptance of an unconditional offer, when the acquirer starts directing the acquiree's operating and financing policies, or the date competition or other authorities provide necessarily clearances.
