Document ID: chunk:federal_register_of_legislation:F2023C00389:body:0:p17
Version: federal_register_of_legislation:F2023C00389
Segment Type: other
Provision Reference: 
Character Range: 43821–46932

separate transactions that are not to be included in applying the acquisition method:
(a) a transaction that in effect settles pre-existing relationships between the acquirer and acquiree;
(b) a transaction that remunerates employees or former owners of the acquiree for future services; and
(c) a transaction that reimburses the acquiree or its former owners for paying the acquirer's acquisition-related costs.
Paragraphs B50–B62 provide related application guidance.

Acquisition-related costs
53 Acquisition-related costs are costs the acquirer incurs to effect a business combination. Those costs include finder's fees; advisory, legal, accounting, valuation and other professional or consulting fees; general administrative costs, including the costs of maintaining an internal acquisitions department; and costs of registering and issuing debt and equity securities. The acquirer shall account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be recognised in accordance with AASB 132 and AASB 9.

Subsequent measurement and accounting
54 In general, an acquirer shall subsequently measure and account for assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination in accordance with other applicable Australian Accounting Standards for those items, depending on their nature. However, this Standard provides guidance on subsequently measuring and accounting for the following assets acquired, liabilities assumed or incurred and equity instruments issued in a business combination:
(a) reacquired rights;
(b) contingent liabilities recognised as of the acquisition date;
(c) indemnification assets; and
(d) contingent consideration.
Paragraph B63 provides related application guidance.

Reacquired rights
55 A reacquired right recognised as an intangible asset shall be amortised over the remaining contractual period of the contract in which the right was granted. An acquirer that subsequently sells a reacquired right to a third party shall include the carrying amount of the intangible asset in determining the gain or loss on the sale.

Contingent liabilities
56 After initial recognition and until the liability is settled, cancelled or expires, the acquirer shall measure a contingent liability recognised in a business combination at the higher of:
(a) the amount that would be recognised in accordance with AASB 137; and
(b) the amount initially recognised less, if appropriate, the cumulative amount of income recognised in accordance with the principles of AASB 15 Revenue from Contracts with Customers.
This requirement does not apply to contracts accounted for in accordance with AASB 9.

Indemnification assets
57 At the end of each subsequent reporting period, the acquirer shall measure an indemnification asset that was recognised at the acquisition date on the same basis as the indemnified liability or asset, subject to any contractual limitations on its amount and, for an indemnification asset