Alert: Accounting for Reverse Acquisitions where Acquiree Does Not Constitute a Business

Category: IFRS

Alert: Accounting for Reverse Acquisitions where Acquiree Does Not Constitute a Business

In March 2013, The IFRS Interpretations Committee (IFRIC) discussed the issue of accounting for reverse acquisitions where the acquiree does not constitute a business.


The IFRIC concluded that IFRS 2 Share-based Payment should be applied to account for these reverse acquisitions. The resulting difference between the consideration paid by the acquirer and the fair value of the acquiree's identifiable assets and liabilities is considered a listing expense. IFRIC believes the standards are clear and, as a result, no further action will be needed.

For full text of the March 2013 IFRIC decision summary, click here.

This communication contains a general overview of the topic and is current as of May 28, 2014. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2014. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.