Accounting for M&A Transactions

Building on students' general background in financial accounting, this course introduces an area that is highly relevant in practice: the accounting for business combinations (M&A transactions). Students will learn how to prepare and analyze consolidated financial statements. More specifically, it will be explained how newly acquired subsidiaries are incorporated into parent companies’ consolidated financial statements (purchase price allocation) and how they are treated in subsequent reporting periods (e.g. goodwill accounting). Based on the above, it will be discussed how M&A transactions affect financial statements and key financial ratios. Accounting theory, finance theory and valuation techniques as well as legal texts will form the basis for the lecture. The examples and exercises discussed throughout the course relate to financial statements prepared under International Financial Reporting Standards (IFRS). However, the issues discussed and the techniques presented also pertain to other national accounting systems (e.g. HGB, US GAAP or UK GAAP).

Accounting Theory, Financial Theory and Valuation Techniques, Application of Legal Requirements

The readings will be based mainly on the following two textbooks: Alexander/Britton/Jorissen/Hoogendoorn/van Mourik (2017), International Financial Reporting and Analysis, 7th edition, Cengage Learning.Picker/Leo/Loftus/Wise/Clark/Alfredson (2016), Applying International Financial Reporting Standards, 4nd edition, Wiley.

Lecture with sufficient room for discussion of conceptual and practical problems to bring about a deeper understanding of the accounting issues arising with regard to business combinations. More complex accounting aspects are practiced with concrete examples and exercises. Guest lectures of practitioners complement the content of the course.

Written examination.

Financial Statements (oder gleichwertig), BSc

150