A common control transaction refers to the transfer of assets, businesses or other transactions among entities under the control of the same party. These transactions usually occur in the context of group restructuring, spinoffs and initial public offerings. After Covid-19 pandemic, it is expected that there will be an increase in restructuring activities, potentially involving common control transactions.

Common control transactions fall outside the scope of HKFRS 3, Business Combination (“HKFRS 3”). Accounting Guideline 5 (Revised), Merger Accounting for Common Control Combinations (“AG 5”), only sets out the basic principles and procedures of merger accounting when recognizing a common control combination in consolidated financial statements. However, there is no specific guidance under IFRS/HKFRS for the accounting treatment of other common control transactions that are not transacted in fair value.

This seminar/webinar will cover the followings:

(1) Introduction of common control transactions

(2) Latest status of IASB project addressing the accounting for common control transactions

(3) Introduction of basic principles and procedures of merger accounting when recognizing a common control combination in consolidated financial statements

(4) Accounting methods for transfers of businesses under common control in separate financial statements

(5) Accounting methods for transfers of assets/other transactions between entities under common control

(6) Illustrative examples

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