Business Combination and the tax and corporate law consequences of applying IFRSs in Brazil: some challenges to Brazilian lawyers and Brazilian accountants

Abstract

Business Combination (BC) transactions doubtlessly constitute a multidisciplinary field of study with deep conceptual issues. Issues regarding corporate regulation, tax regulation and economic law emerge naturally. The expert on the subject is also stimulated to enter into the fields of Financial Accounting, Tax Accounting and Corporate Finance in order to better understand it. This paper is focused on examining some BC transactions, under a normative research approach, considering some IFRS in force, in particular IFRS n. 3, which is the basis of the Brazilian accounting rule CPC n. 15, and also taking into consideration Tax and Corporate Regulation. It is observed that many controversial questions arise from Corporate and Tax Regulation in force. Anomalies in the Financial Accounting with regards to the treatment of some transactions are also observed, as in the case of contingent consideration settled with own shares of the subsidiary. The author hopes that this paper contributes to the debate of the questions raised.

Business Combination; “goodwill”; tender offer; tax regulation; corporate regulation