FRS 6 Acquisitions and Mergers
Issued September 1994. Effective for accounting periods ending on or after 23 December 1994.
FRS 6 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:
Synopsis
There are two types of business combinations – acquisitions and mergers. The objective of FRS 6 is to ensure that merger accounting is only used for those business combinations that are true mergers where the result is the formation of a new reporting entity as a substantially equal partnership where no party is dominant. FRS 6 sets out five criteria that must be met for merger accounting to be used. When those five criteria are met merger accounting should be used. If those five criteria are not met then acquisition accounting should be used.
Last updated 21 June 2015