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Convergence and Divergence Regarding Business Combinations

Convergence and Divergence Regarding Business Combinations
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Author(s): Alin Eliodor Tănase (Titu Maiorescu University, Romania), Traian Ovidiu Calotă (Titu Maiorescu University, Romania) and Gabriela Claudia Oncioiu (Titu Maiorescu University, Romania)
Copyright: 2021
Pages: 14
Source title: Sustainability Reporting, Ethics, and Strategic Management Strategies for Modern Organizations
Source Author(s)/Editor(s): Ionica Oncioiu (Titu Maiorescu University, Romania), Sorinel Căpușneanu (Titu Maiorescu University, Romania), Dan Ioan Topor (1 Decembrie 1918 University, Romania) and Dana Maria (Oprea) Constantin (University of Bucharest, Romania)
DOI: 10.4018/978-1-7998-4637-6.ch005


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The presence of several legal entities within the same group entails the existence of as many independent accountants as there are companies. In accordance with IFRS 3 “business combinations,” the result is goodwill that will be recognized as a non-current intangible asset in the consolidated balance sheet, being subjected annually to the impairment test; insofar as the investment cost is lower than the acquisition cost of the net assets, the negative goodwill will be obtained which will be recognized in the form a profit in the consolidated profit and loss account. In addition, national differences in accounting, taxation, and auditing are the sources of the various problems that arise in the process of controlling subsidiaries and consolidating accounts. This chapter aims to study the convergence and divergence regarding business combinations in the joint business as well as to analyze the managerial controversies that are presented in the conversion of the financial statements.

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