Acquisition of assets
Entity A acquired a holding company that held a single asset at the time of acquisition. That holding company had no employees and the asset itself was not in use at the date of acquisition. Entity A accounted for the transaction under its previous GAAP using the purchase method, which resulted in goodwill. Can Entity A apply the business combinations exemption to the acquisition of this asset?
If Entity A concludes that the asset is not a business as defined in IFRS 3, it will not be able to apply the business combinations exemption. Instead, Entity A should account for such transaction as an asset acquisition.