Lease Accounting for a Business Combination - Nomos One

Lease accounting for acquisitions from a business combination

Lease accounting, business combinations, and how Nomos One can help

A business combination, more commonly known as a takeover, acquisition or merger, is a transaction in which an acquirer (an investor entity) obtains control of one or more businesses. This involves the recognition of identifiable assets and liabilities, which are measured at fair value. This includes any leased assets and liabilities.

Business combination accounting refers to the financial reporting rules and procedures used to record and report the financial results of merging or acquiring companies. Accounting for leases under IFRS 16 can be complex at the best of times, but additional considerations and management are required when a business combination transaction takes place.

Business combination accounting involves consolidating the acquired entity's assets, liabilities, and equity into the acquiring company's financial statements, typically at fair market value. This accounting method helps stakeholders understand the financial impact of the merger or acquisition on the combined entity's financial health and performance.

In this paper, we explore the purpose of  and how we help our customers. Whether one business is acquiring another as a subsidiary through ownership rights or purchasing the operations and assets of another, Nomos One can assist when leases are involved.

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This paper covers:

  • What causes the need for a Fair Value Exercise during a business combination?
  • Can Nomos One help?
  • A checklist to help you prepare your leases for a Fair Value Exercise
Is this resource free?

Yes. Nomos One employs a team of experts who live and breathe IFRS 16. We want to share our knowledge with you so your implementation project and ongoing reporting requirements are as efficient, accurate and simple as possible.

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