The aim of this paper is to analyze the phenomenon of business combinations under common control (BCUCC), with emphasis on the Italian experience, focusing on information deduced from a sample of Italian financial statements and comparing them with each other and with the same number of European listed companies. We start from a theoretical analysis of the phenomenon, contextualizing it within the IAS/IFRS framework and discuss the different visions and possible solutions that have been suggested by other important national and international organizations (US GAAP, Assirevi, China GAAP), and then proceed to analyze the financial statements of the most important Italian companies in detail. We subsequently consider the two different methodologies for accounting, delineating the analogies and differences between them, in an attempt to investigate the reasons for why one of them could be preferable to the other and the different effects of each on consolidated financial statements. Finally we analyze the different informational needs by users of the financial statement compared with cases of “normal” business combinations. The samples chosen for our research comprise a certain number of companies randomly chosen from Italian stock exchange quotations as well as from the other major Italian stock index FTSE MIB.
Business Combinations Under Common Control (BCUCC): the Italian Experience
BIANCONE, Paolo
2013-01-01
Abstract
The aim of this paper is to analyze the phenomenon of business combinations under common control (BCUCC), with emphasis on the Italian experience, focusing on information deduced from a sample of Italian financial statements and comparing them with each other and with the same number of European listed companies. We start from a theoretical analysis of the phenomenon, contextualizing it within the IAS/IFRS framework and discuss the different visions and possible solutions that have been suggested by other important national and international organizations (US GAAP, Assirevi, China GAAP), and then proceed to analyze the financial statements of the most important Italian companies in detail. We subsequently consider the two different methodologies for accounting, delineating the analogies and differences between them, in an attempt to investigate the reasons for why one of them could be preferable to the other and the different effects of each on consolidated financial statements. Finally we analyze the different informational needs by users of the financial statement compared with cases of “normal” business combinations. The samples chosen for our research comprise a certain number of companies randomly chosen from Italian stock exchange quotations as well as from the other major Italian stock index FTSE MIB.
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