Business Combinations & Associates (IFRS 3 / IAS 28)
by ERP Heritage https://www.erpheritage.com.au/Business Combinations & Associates (IFRS 3 / IAS 28)
Compute goodwill the IFRS 3 way, post a balanced purchase price allocation, and roll investments in associates and joint ventures forward under the IAS 28 equity method, all inside Odoo 19 Community.
Why this module
Business Combinations & Associates (IFRS 3 / IAS 28)
Goodwill that actually adds up
Enter consideration, non-controlling interest, any previously-held interest, and the fair value of net assets, and the goodwill is the standard's arithmetic. A negative result flips automatically to a bargain purchase gain recognised in profit or loss.
The whole allocation in one entry
List identifiable assets and liabilities at fair value on lines and post a single balanced move that debits each asset, credits each liability, raises deferred tax on the step-up, books goodwill, and credits consideration and non-controlling interest.
Associates that roll forward
Carry an associate or joint venture at cost, then pick up your share of profit, record dividends as a reduction not income, impair, and dispose, each as its own balanced entry that updates the carrying amount and the cumulative totals.
Day in the life
From a signed deal to a posted acquisition
An acquisition closes. You open a business combination record, enter the consideration transferred, set non-controlling interest at fair value or let the proportionate basis measure it from the net assets, and add each identifiable asset and liability at its fair value with a tax base. The goodwill, the fair-value step-up, and the deferred tax all compute as you type. As an Accounting Manager you post the purchase price allocation: one balanced entry books the assets, liabilities, deferred tax, goodwill, consideration, and non-controlling interest, and the record locks so it cannot be edited out from under its move. Later, for an associate you hold, you activate the investment at cost and each period pick up your share of its profit, record the dividend it pays, and if needed impair it, watching the carrying amount roll forward.
Edge cases
The cases most modules quietly ignore.
In the shipped code today, each one a place where a cheaper module silently does the wrong thing.
When your share of an associate's loss would take the carrying amount below zero, only the loss that brings it to nil is recognised and it is floored there, rather than driving the investment negative.
A dividend from an associate is posted as a reduction of the carrying amount, not as income, which is what the equity method requires and what a naive receipt entry gets wrong.
Deferred tax on the fair-value step-up feeds back into goodwill: a taxable difference raises a deferred tax liability and increases goodwill, a deductible one lowers it, so the goodwill and the allocation entry stay consistent.
Once a combination is recognised its consideration, non-controlling interest, dates, accounts, and asset lines are locked, and its identifiable asset lines cannot be changed or deleted, so a posted acquisition cannot be retro-edited.
A missing goodwill, gain, investment, share-of-profit, cash, impairment, or disposal account, a missing journal, or an invalid state each raises a clear message instead of posting a broken or unbalanced entry.
What is inside
Built to do the job, end to end.
- eh.business.combination. The IFRS 3 acquisition record: consideration, non-controlling interest basis and amount, previously-held interest, computed goodwill or bargain purchase gain, and draft, recognised, and cancelled states with tracking.
- eh.business.combination.asset. Identifiable asset and liability lines at fair value with a tax base, driving the identifiable net assets, the fair-value step-up, and the deferred tax; locked once the parent is recognised.
- eh.equity.investment. The IAS 28 associate or joint venture: ownership percentage, cost, carrying amount, and cumulative share of profit, dividends, and impairment, with pickup, dividend, impairment, and disposal actions.
- Two posting paths. action_recognise books goodwill or the bargain purchase gain against an acquisition clearing account; action_recognise_ppa posts the full purchase price allocation from the entered lines.
- Sealed entries and manager gating. Every move is created sealed and posted, posting actions require the EH Accounting Manager group, and each investment move links back to its record for a one-click journal-entry view.
- Sequences and security. Per-year references (BC and EQINV prefixes), and three-tier access for EH user, manager, and read-only auditor across all models.
Honest about the edges
What this does not do, so nothing surprises you.
- It records a single acquirer's acquisition entry and equity-method roll-forward; it is not a full consolidation engine and does not eliminate intra-group balances or produce consolidated statements.
- Share of profit, dividends, and impairment are entered per period as amounts you provide; it does not read the investee's own ledger or automate the pick-up.
- Goodwill is recognised, but the module does not run a subsequent annual IAS 36 impairment test on that goodwill.
- Deferred tax is raised only on the aggregate fair-value step-up of the entered lines at a single rate; it is not a general deferred tax engine.
- Posted entries are sealed; corrections are made by reversing and creating a new record, not by editing a recognised combination in place.
- It does not fetch or apply live foreign exchange rates; amounts are recorded in the company currency.
odoo 19 goodwill, IFRS 3 business combination odoo, purchase price allocation odoo, bargain purchase gain, non-controlling interest fair value, IAS 28 equity method odoo, investment in associate accounting, joint venture equity method, share of profit pickup, deferred tax on acquisition IAS 12, step acquisition previously held interest, goodwill journal entry odoo community
Business combination, goodwill and NCIAn IFRS 3 acquisition measuring goodwill as consideration plus non-controlling interest less the fair value of identifiable net assets, with deferred tax on the fair-value step-ups.
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