Acquisition and merger accounting
7. The following provisions of this Chapter shall apply where an undertaking becomes a subsidiary undertaking of the parent undertaking and that event is referred to in those provisions as an "acquisition", and references to the "undertaking acquired" shall be construed accordingly.
8. An acquisition shall be accounted for by the acquisition method of accounting unless the conditions for accounting for it as a merger are met and the merger method of accounting is adopted.
(1) The acquisition method of accounting is as set out in this paragraph.
(2) The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition.
(3) The income and expenditure of the undertaking acquired shall be brought into the group accounts only as from the date of the acquisition.
(a) There shall be set off against the acquisition cost of the interest in the shares