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Conduct Committee findings in relation to accounting under IFRS 3

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03 Jun 2015

The Financial Reporting Council (FRC) has issued a press release of the findings of its Conduct Committee stemming from the review of the annual reports and accounts of fastjet Plc ("the company").

The principal issue related to a reverse takeover under the AIM rules accounted for as the purchase of a business by the company using acquisition accounting under IFRS 3 Business Combinations.

Following its review, the Conduct Committee concluded that the company was, for accounting purposes, the acquiree in the business combination and therefore that the transaction should have been accounted for as a reverse acquisition.

The Conduct Committee press release serves as a reminder that entities should review transactions carefully to identify the acquirer in an acquisition scenario as this can have a significant impact on the resultant accounting under IFRS 3.

Please click here for the full press release on the FRC’s website.

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