26.2 Features of Acquisition Accounting

FRS 6 includes the following key features of acquisition accounting:

1. identifiable assets and liabilities of the companies acquired should be included in the acquirer's consolidated balance sheet at fair value at date of acquisition;

2. results and cash flows should be brought in from the date of acquisition;

3. previous year figures for the reporting entity should not be adjusted;

4. the difference between:

   1. the fair value of the net identifiable assets acquired; and

   2. the fair value of the purchase consideration; is positive or negative goodwill.