Analysis of AASB 3

Running head: ANALYSIS OF AASB 3
ANALYSIS OF AASB 3
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ANALYSIS OF AASB 31
Introduction
Application of AASB 3
The aim of the standard is to improve the relevance and comparability of the
information that a entity provides in its financial statements about a business combination and
its effect (Yang 2018). To fulfil that the standard has built up guidelines for the acquirer these
guidelines are stated below
Recognise and calculate the identifiable assets that are recorded in the financial
statements , the liabilities that are estimated and any non controlling interest in the acquirer.
The goodwill acquired are identified and measured that are recorded in the balance
sheet and the gain from a bargain purchase and
Determine what information is required to be disclosed to enable users of the financial
statements to assess the characteristics of the financial effect on the business combination.
After Woolworth, anchorage acquired the business of dick smith in November 2012.
Dick smit is the largest consumer electronics chain in Australia having 381 stores. During the
Anchorage’s ownership period Dick smith started to expand its store network and that
decision of the company under the changed ownership has failed and become the main reason
for the collapse of the company (Karolyi and Liao 2017).
The acquisition method that is applicable for the company under the AASB 3 standard
are mentioned below
 Identifying the acquirer
 Determine the date of acquisition
 Recognising the identifiable assets acquired the liabilities assumed and any non-
controlling interest in the acquire and