AFAR | R.E.

MIRANDA

FULL PFRS COMPARED TO PFRS FOR SMES

PFRS FULL SMEs

Acquisition Method under Purchase Method under
As to method PFRS 3 section 19 par 6.

At the option of the entities: At proportionate share of net

1. at Fair Value asset of the Acquiree
AS to NCI measurement 2. At Proportionate Share in
basis the Net Identifiable Asset of
the Acquiree

Treated as Expense under Added in the total

PFRS 3. Hence, not included consideration transferred for
in the consideration Goodwill computation
As to treatment of Direct
transferred purposes. Hence, included in
Cost
the cost of business
combination.

The acquirer shall recognize The acquirer shall recognize

contingent liability under contingent liability ONLY if:
PFRS 3 if: 1. the fair value can be reliably
1. it is a present obligation measured
As to treatment of
arising from past events
contingent consideration
AND
2. the fair value of which can
be measured reliably

Goodwill is not amortized but Goodwill is not amortized over

subjected to impairment test. useful life NOT exceeding 10
Thus, PFRS 3 provides that years. Since the maximum
goodwill be measured useful life is 10 years, it shall
subsequently at: be used if the problem is silent
As to subsequent
measurement of Goodwill
Cost less Accumulated Thus goodwill is measured at:
impairment loss
Cost less accumulated
impairment loss less
accumulated amortization