The core values for this course are integrity and excellence. Applying the values of integrity and excellence, discuss ethical considerations of accounting for business combinations in a manner that prevents misunderstanding in the questions below.
Business combinations have become an important strategic move by corporations for various reasons.
Discuss the various types of business combinations.
Why may companies seek to engage in business combinations?
Discuss the importance of understanding the GAAP behind business combinations before performing the accounting. Additionally, why is it important that accountants report the numbers as dictated by GAAP regardless of what they may be?
First, it will help to understand the various types of business combinations available in accounting: principle-based and rules-based accounting. IFRS is principle-based while U.S. GAAP is rules-based. Here's an article explaining the differences: http://www.investopedia.com/ask/answers/06/rulesandpriciplesbasedaccounting.asp#axzz1bVpGGhkf
The expert discusses the various types of business combinations. Why companies seek to engage in business combinations are determined.