What is a step acquisition?

A step acquisition, or piecemeal acquisition, is when a company gains control over another company in stages by purchasing shares over time, rather than in a single transaction.

Why do I have to remeasure the first investment to fair value?

IFRS 3 requires it because gaining control is a significant economic event that changes the nature of your investment; you must revalue your entire holding at the control date to reflect its true worth as part of a subsidiary.

What if I only have an hour to study this topic?

Focus exclusively on re-creating the goodwill calculation from the worked example. Do not read the entire chapter; active practice of the calculation is the highest-value use of that hour.

Where does the gain or loss on remeasurement go?

The gain or loss on remeasuring the previously held equity interest is recognised in the parent’s profit or loss for the period in which control is gained.

How will I know if I'm ready to answer a question on this?

You are ready when you can look at a scenario and, without checking notes, correctly calculate the gain on remeasurement and the final goodwill figure, showing clear workings for both.

What happens if I forget this in the exam?

Forgetting this specific rule might cost you 2-3 marks in a larger consolidation question. The best strategy is to secure your easier marks first and then attempt it; a partial attempt showing some logic is better than leaving it blank.

Is this different from an acquisition of an associate?

Yes, this process is for when you gain *control* (typically >50% holding). Acquiring an associate involves gaining *significant influence* (typically 20-50%) and is accounted for using the equity method under IAS 28, which does not involve goodwill or remeasurement in this way.

Does the NCI measurement method affect the gain?

No, the gain on remeasurement of the parent's previously held interest is calculated independently of the NCI measurement method. The NCI method (proportionate share vs. fair value) only affects the goodwill calculation.

SBR Strategic Business Reporting

Complex Group Step Acquisitions (SBR)

Master complex group step acquisitions in your ACCA SBR exam. Learn how IFRS 3 and IFRS 10 apply to piecemeal acquisitions with a full worked example.