Must describe from thefollowing topic - AASB 3 - Businesscombination - AASB 116 - PropertyPlant and equipment - AASB 138 -Intangible Assets According to those three elements mustcompared with...

Abstract

Australian Accounting Standards Board (AASB) 13 lays down details for fair value measurement and recognition
while reporting financial statements in Australia. The basis of this standard is applicable in various other standards
(excluding the exceptions mentioned in the standard itself). This standard works as a common guidance to remove
inconsistencies (if any) in application of fair value measurement thus helps prevent complexity in financial
reporting. Fair value measurements are mostly applicable for property, plant and equipment, business acquisitions
and other assets like intangibles. The revisions in AASB 13 have added more clarity to the idea in terms of dealing
with financial as well as non-financial assets separately. We present some relevant accounting standards which use
fair value concept extensively.
Introduction:

AASB 13 which talks about fair value assessment is applicable to all transaction or balances, whether financial or
non-financial.
Fair value method uses market-based measurement method. It does not use any entity-specific measurement criteria.
It is possible to obtain market information or transactions for some liabilities and assets, whereas for others, clear
observable market transactions and market information might not be available. In either case, the objective of
measurement of fair value remains the same – it aims to estimate the price at which market participants would sell
or transfer the liability in an an orderly transaction at a given measurement date under a set of given current market
conditions (Australian Accounting Standards Board 2010).
When measuring fair value an entity shall consider the set of characteristics of a particular asset or liability at the
date of measurement. The following are the examples of such characteristics:
(a) the condition as well as the location of the asset; and
(b) restrictions, if present, on the usage or selling of the asset.
Use of fair value in other accounting standards
We now examine the applicability of fair value assessment in the accounting standards for business combination,
property plant and equipment and intangible assets.

1. AASB3: Business Combinations (Australian Accounting Standards Board 2010)
Scope:
This Standard defines the principles and the requirements for the acquirer that will be needed to:
(a) recognize and measure the liabilities and the identifiable assets acquired and if any non-controlling interest is
present in its financial statements
(b) recognize and measure the acquired goodwill in the process of a business combination or a gain from a
bargain purchase;
(c) determine information that needs to be disclosed so those who use the financial statements can assess the
nature along with the financial effects resulting from the business combination.
This Standard applies to any event or transaction that satisfies the definition of a business combination. This
Standard does not apply to:
(a) the formation of a joint venture.
(b) the acquisition of an asset or a group of assets that do not constitute a business.
(c) a combination of entities or businesses which are already under common control
Recognition:
On the acquisition date, the acquirer shall recognize, separately from goodwill, the liabilities assumed, the
identifiable assets acquired, and any non-controlling interest present in the acquiree. The acquirer will need the
measure the identifiable assets acquired as well as the liabilities assumed at their fair value on the date of
acquisition.
Cost of business combination:
The net assets at the time of liquidation are measured at
(a) the fair value; or
(b) the proportionate share of present ownership instruments’ as recognized amounts of the acquiree’s...