Link with IFRS 3: replacement awards

Learning objectives

• Analyse the allocation of the fair value of a replacement award between pre-combination and post-combination service.L4

Normative references

The syntheses of the reference register are written in French: only the paragraph reference is shown here.

2 questions

• In a business combination, Altaïr SA, the acquirer, replaces awards held by employees of the acquiree with replacement awards whose fair value is {replacement_award_fair_value}. The share of pre-combination service, determined under IFRS 3, is {pre_combination_service_percent} (case data); the market-based measure of the acquiree awards replaced equals that of the replacement awards (case data). Compute the part included in the consideration transferred and the part that will be a post-combination expense.L4
• In a business combination, a colleague takes the whole fair value of a replacement award, 500,000, to the consideration transferred, on the ground that it replaces an award held by employees of the acquiree. What is the error?L4