CERTYNEX IFRS ACADEMY

Hexa SA acquires an office building (land and building) let to one tenant, together with a property management contract. It elects to apply the concentration test. Case assumption: Hexa judges that substantially all of the fair value of the gross assets acquired is concentrated in the building. What does it conclude?

The test is met: the land and the building form a single identifiable asset, and the set is not a business without further analysis.

The test is met, so the set is a business and the acquisition method applies to the building and the property management contract.

The test is not met, because the land and the building are two separate assets.

The test is met, but Hexa must still analyse whether processes are applied to the building before it can conclude.