This article, published on the magazine “Bilancio e reddito d’impresa” – edited by Wolters Kluwer – analyses the accounting guidelines of reverse mergers provided by international accounting standards (IAS - IFRS) which have been applied in Italy since 2005.
In Italy, pursuant to Legislative Decree no. 38 dated 28 February 2005, the application of IAS - IFRS implied a change in the principles for the preparation of financial statements, for example concerning mergers and acquisitions, governed by IFRS 3 – Business combinations. This standard provides for accounting rules applicable to events occurring exceptionally during the management of a company (business combinations), but these do not exactly match non-recurring operations identified by the Italian regulation, i.e. transfer, transformation, merger, demerger and liquidation of a company.
After having illustrated the rules of IFRS 3 and its application to reverse mergers, the article goes through some considerations on the evaluations to be advisably made to avoid future objections by the Italian Revenue Office basing on the regulation on the abuse of rights.
For further information, please contact Emanuele Pucci.
