The Accounting Entries of Mergers and Acquisitions in Europe

Abstract

The purpose of the present paper is to show the complexity and help the scientists of accounting to know and understand the accounting entries of mergers and acquisitions in accordance with the IASB and IFRS instructions.

So this paper attempts to describe how we can present the mergers and acquisitions after they have been completed in the accounting books of the companies that have been involved.

We give plenty of examples from different categories of mergers and acquisitions to make more understandable the accounting entries.

According to the IFRS 3 there are three main accounting methods of mergers and acquisitions. These are: a) Pooling of Interest Method (Amalgamation in nature of merger), b) Purchase Method (Amalgamation in nature of purchase), and c) The cost Method. There are many different types of mergers and acquisitions with many accounting entries based to the above three accounting methods.

Therefore, the content and the structure of this paper reflect the effort to understand the accounting treatment of mergers and acquisitions to record them in the accounting books after all the payments have been finished.