READOS / Business
Acquisitions, Groups and Investment Accounting
How acquisitions, group structures and investments in other companies are accounted for and what the numbers mean.
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- 01Buying a business in Australia: what the accounting means for buyersA practical guide for business owners planning an acquisition: how deal terms flow into the accounts, from due diligence and purchase price allocation to earn-outs, goodwill and post-deal reporting.
- 02Buying a business or buying assets? The business test explainedWhether an acquisition counts as buying a business changes the accounting completely. What inputs, processes and outputs mean, how the concentration test works, and worked examples.
- 03Asset acquisition or business combination: why the accounting differsA side-by-side guide to how the same purchase is recorded as an asset acquisition or a business combination: cost allocation, transaction costs, goodwill and the effect on future profits.
- 04Goodwill in acquisitions: what it is, how it is measured and why it is impairedGoodwill is what a buyer pays for a business beyond its identifiable net assets. How it is calculated, what it represents, how impairment testing works and what write-downs tell you.
- 05What control means: parents, subsidiaries and who must consolidateControl decides whether one entity must include another in its group accounts. How control is assessed through votes, rights and exposure to returns, including indirect ownership.
- 06Consolidated financial statements: reporting a group as one businessHow a parent and its subsidiaries are combined into one set of accounts: adding line by line, eliminating the investment and intra-group dealings, recognising goodwill and non-controlling interests.
- 07The equity method explained: accounting for associates and joint venturesHow investors with significant influence account for their share of another company's results, why dividends reduce the investment, and the traps hidden in equity-accounted profits.
- 08Accounting for investments in other companies: influence decides the methodOwning shares in another company can be reported three very different ways. How the level of influence decides between fair value, the equity method and consolidation, in Australia and the US.
- 09Small shareholdings: fair value accounting and its effect on profitHow businesses account for small investments in other companies' shares, how fair value is measured for listed and unlisted shares, and why market swings can flow straight into reported profit.
- 10Share buybacks: when a company invests in itselfWhat share buybacks and treasury stock are, why a history of buybacks can signal a strong business, and when buybacks help owners and when they do not.
- 11US GAAP and Australian standards: key differences for investments and groupsAustralian standards follow IFRS; much international material follows US GAAP. Where the two differ for equity investments, associates, control, business combinations and goodwill, and why it matters.
- 12Why ambitious companies fail, and when acquisitions make sense: lessons from an airline collapse and a portal mergerLessons from a premium airline's collapse and a property-portal acquisition: complexity, ill-timed expansion, cash versus profit, trust, brand fit, acquisition logic and funding.
These topic-based reading collections are organised alphabetically; chapters may be read in any order.
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