Tiziano Onesti

Dialogue with standard setters. Business Combinations under Common Control: Concerns, Criticisms and Strides

Although excluded from the scope of IFRS 3, business combinations under common control (BCUCCs) are widespread transactions that take place all over the world in different forms, often as a reorganization or restructuring among related parties. These transactions occur when entities are ultimately - not transiently - controlled by the same party/ies before and after the combination (which is neither a capital market nor an arm’s length transaction and devoid of economic substance: indeed, no change of control is entailed). The scarce and fragmentary literature, not to mention the lack of clear consensus on the topic, contributes to the prevailing concerns on how to account for BCUCCs. In this complex context, the purpose of this work is to assess the possible and various accounting methods and identify the most suitable, accredited and consistent techniques.

Acquisition-type or merger-type accounting? Further insights on transactions involving businesses governed by the same party(-ies)

This paper - aiming at encouraging a fruitful debate - intends to highlight the discontinuous evolution of the accounting solutions explored by notable bodies (Efrag-Oic, Iasb, Fasb, Kasb, etc.) with reference to transactions involving businesses under common control. The work finally recompose them in two basic categories (discussing their pros/cons as well), here analyzed: acquisition-type accounting, which emphasizes fair value (emergence of exchange or current amounts) vs. merger-type accounting, linked to historical costs (continuity values approach). The first cluster includes the pure-acquisition and the fresh-start method, whereas the second the predecessor basis and the pooling of interests techniques. The concrete identification of the proper methodology, in this regard, essentially requires the profound understanding of the underlying economics, architecture and key elements of a specific transaction shedding light on the most relevant and reliable information useful to stakeholders.

Going Private and Going Dark Strategies: Literature Review and Directions for Future Research

Corporate delistings can be related to a wide variety of circumstances and operations (going private transactions, going dark strategies, mergers, buy-outs, involuntary delistings, etc.), representing a very complex and highly differentiated phenomenon, whose relevance has recently increased as one of the many effects of the ongoing global financial crisis.In this paper, on the basis of a systematic review of the existing international literature, we give reasons for the need for a wider and deeper theoretical framework for corporate delistings, which we consider to be an essential premise for the conduction of further studies on corporate governance changes and the dynamics of corporate value associated with going-private and going-dark strategies. We provide a possible classification of corporate delistings that deepens the fundamental distinction between voluntary and involuntary delistings. A particular focus is on voluntary delistings, which we differentiate in the light of three main characterising aspects: the subjects who pursue delisting, the strategic context and the operating conditions of the delisted company. We define some uniform areas of observation, which may represent a useful framework for future deeper studies concerning corporate delistings (pre-sale delistings, hidden potential delistings, control strengthening delistings and takeover delistings, either in balanced operating conditions or in presence of crisis/operating distress).