In January 2019, the HKICPA issued amendments to the definition of a business in HKFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. Distinguishing between a business combination and an asset acquisition is important because the accounting treatments are different. One important difference is that the acquirer recognises ‘goodwill’ only in acquiring a business, but not in acquiring a group of assets. 

The workshop will go through the amendments, including the revised definition of a business and the optional concentration test that help assess whether a company has acquired a group of assets, rather than a business. The workshop will walk through with participants how to apply the amendments with some examples and also share with participants some practical issues in applying HKFRS 3.