Mergers and Acquisitions from an Accounting Approach: A Review of the Empirical Literature

The European Committee support that the Financial Statements drawn up in accordance with IFRS as issued by the International Accounting Standards Board (IASB) provide users of these statements with a sufficient level of information to enable them to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of an issuer. The International Financial Accounting Standards (IFRS) are a sound basis on which to unify accounting standards across the world. In its deliberations on and in elaborating positions to be taken on documents and papers issued by the IASB in the process of developing international accounting standards (IFRS and SIC), the Commission should take into account the importance of avoiding competitive disadvantages for European companies operating in the global marketplace, and, to the maximum possible extent, the views expressed by the delegations in the Accounting Regulatory Committee.This paper attempts to present the accounting methods applied with literature and examples when a merger or an acquisition takes place. This work is mainly directed at students and scientist of accountant and finance. Professionals also will get benefit from this paper because they will learn how to apply and understand the IFRS 3, so as to be able to fill in and analyze financial statements with IFRS. At the beginning we talk about IFRS 3 which is relevant to the accounting methods in mergers and acquisitions that occurred in every European country between big firms. We also show what happened when a big firm wants to takeover a small firm. Afterwards we analyze the steps that are needed to take when a firm wants to takeover a bank or an enterprise. Then we describe the Goodwill that is given from the bidder to the target firm if there is any. But which is the fair value of a takeover. If the bidder wants to allocate the cost should use the notes that we describe to determine it. Keywords: Finance, Accounting, Mergers and Acquisitions Jel Classification: M41, G34 DOI: 10.7176/RJFA/10-16-01 Publication date: August 31st 201