ACCOUNTING FOR BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS - 2

The course contributes to the learning objectives of the Master Degree in Accounting and Finance, which aims to prepare students addressing accounting issues relative to the representation and communication of business activities and their business combinations under national and international accounting standards. To this extent, the main goals of the course are:
- to analyse the different types of enterprise extraordinary transactions (mergers and acquisitions) and the economic and strategic reasons at the basis of business combinations;
- to deepen the financial information relative to the different types of enterprise extraordinary transactions;
- to address the issues related to the definition of group and control, as well as the preparation of consolidated financial statements in a national and international perspective;
- to examine the national law (D. Lgs 127/91 e OIC 17) and International Financial Reporting Standards (IFRS) with reference to the accounting representation and communication of the activities of business combination.
The accounting issues arising from the consolidation of financial statements are explained in the first module of the course (Group accounting and enterprise extraordinary operations – 1).

1 KNOWLEDGE AND UNDERSTANDING
The students of the Master Degree in Accounting and Finance have to acquire the knowledge and understanding in business administration with particular reference to the accounting representation, the financial statements and the other tools to support decisions. To this extent, this course may complete their previous training in the area of financial statements of one single entity. At the end of this course, students will know and be able to understand:
- the definition of economic capital and its main differences arising from the calculation of working capital;
- the main estimated methods of economic capital focusing on the national and international models presented in previous literature;
- the definition of enterprise extraordinary transaction under the national accounting regulation and academia;
- the definition of business combination under International Financial Reporting Standards (IFRS);
- the accounting issues relative to the different types of enterprise extraordinary transactions under national acconting standard and the International Financial Reporting Standards (IFRS).
2 APPLYING KNOWLEDGE AND UNDERSTANDING
The students of the Master Degree in Accounting and Finance have to become experts in issues on accounting business combinations. At the end of this course, students will be able:
- to carry out the firm’s value estimation in the event of a transfer of an undertaking (economic capital);
- to carry out accounting entries relative to the different enterprise extraordinary transactions under local accounting standards (OIC);
- to carry out accounting entries relative to the different enterprise extraordinary transactions under the International Financial Reporting Standards (IFRS).

In order to attend the course, it is necessary to have the basic concepts and language of the economic analysis of business processes, as well as the basic skills for the accounting of business events and the preparation of financial statements, which have been developed in the course of Business Administration.
Moreover, the following topics have to be acquired:
- the composition of financial statements and the structure of the balance sheet and income statement prepared under the Civil Code and International Financial Reporting Standards (IFRS), which have been developed in the course of Financial Statement Analysis;
- the measurement and representation of assets and liabilities under the Civil Code, national accounting standards (OIC) and International Financial Reporting Standards (IFRS), as well as the effects in terms of deferred taxes, which have been analysed in the course of Financial Accounting.
Given the consistency and complementarity of the topics of course, it is necessary to know the topics of the first module (Group accounting and enterprise extraordinary operations – 1).

The evaluation method of firms’ economic capital.
The enterprise extraordinary transactions under the national accounting regulation and academia.
The definition of business combination under the International Financial Reporting Standards (IFRS).
The enterprise mergers: economic purpose, regulation and accounting issues.
The enterprise divisions: economic purpose and procedures, different types of divisions, accounting issues.
The enterprise transfer.
The enterprise lease: tax and accounting regulation, accounting for assets, accounting issues relative to lessee and lessor.
The enterprise transfer: regulation and accounting issues.

Mancin M. (a cura di), Le operazioni straordinarie d'impresa. Normativa civilistica e rilevazioni contabili secondo i principi OIC e IFRS, Giuffrè Francis Lefebvre, Milano, 2020, excluding the following parts:
- ch. 2: par. 4, 5, 6;
- ch. 3: par. 3.3;
- ch. 4: par. 5.3;
- ch. 7: par. 6 e 7;
- ch. 8: par. 6;
- ch. 9;
- ch. 10.

Recommended supplementary readings:
Potito L., Le operazioni straordinarie nell'economia delle imprese, Giappichelli, Torino, 2020

One exam for both modules of the course (Group accounting and enterprise extraordinary operations – 1 and Group accounting and enterprise extraordinary operations – 2), and it is just written.
Generally, the exam consists of one open-ended theoretical question and one exercise for each module of the course. It lasts 2 hours.
To pass the exam, students have to get a sufficient evaluation in both modules. Otherwise, it is necessary to take the entire exam again.

The course includes lectures during which examples of the enterprise extraordinary items are presented. The operating issues on the enterprise extraordinary items may be discussed by invited external managers.

- REGISTRATION FOR EXAM. Online registration is COMPULSORY. In the case of registration problems, students are required to contact the Campus economico some days BEFORE the closing date of registration.

written