Acta Univ. Agric. Silvic. Mendelianae Brun. 2018, 66, 313-323
Published online 2018-02-28

Business Combinations of Czech Companies: Empirical Analysis of Their Typology

Jiří Pospíšil, Hana Vomáčková

Department of Financial Accounting and Auditing, Faculty of Finance and Accounting, University of Economics Prague, nám. W. Churchilla 1938/4, 130 67 Praha 3, Czech Republic

This paper is a descriptive study which analyses company transformations - a subset of M&A - which took place in the Czech Republic in 2013. Based on the statistical sample containing detail data of 115 transformations, we analysed important aspects of company transformations (M&A) such as ownership structure of the participating companies, deployment of the effective date, acquisition date, balance-sheet date, date of registration and transformation project date, utilization of available forms of company transformations, utilization of financial statements for transformation purposes and incidence of fair-value revaluation. The results of the research shows, that majority of company transformations are in fact corporate holdings reorganisations rather than business combinations as defined by IFRS 3 and it also suggests that the rules for accounting for these transactions are in fact misused for distribution of earnings (even unrealized earnings) through the corporate holdings. We have also identified cases of severe distortion of faithful representation of successor’s company financial position, most often as a result of retrospective company transformations, where the effective day of the merger was put before the date of acquisition of the majority on target’s equity.


This paper has been prepared within the research project “Economic Impacts of the IFRS Adoption in Selected Transition Countries” (supported by the Czech Science Foundation, No. 15-01280S).


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