CERTYNEX IFRS ACADEMY

Mistral SA acquires 90% of the voting rights of Zéphyr SA, paying in cash. Zéphyr is larger than Mistral in assets and revenue. Case assumption: under the IFRS 10 guidance, Mistral obtains control of Zéphyr. A trainee proposes naming Zéphyr as the acquirer because it is the larger. How should you answer?

Zéphyr is the acquirer, because the acquirer is the larger entity, measured by its assets, revenues or profit.

One must first examine the composition of Zéphyr's board and the terms of payment before the acquirer can be named.

Mistral is the acquirer: it obtains control, and relative size does not override the analysis of control.

Mistral and Zéphyr are each other's acquirer, since each contributes assets and liabilities to the combination.