Business Combinations

A business combination is a form of merging one company with another company in order to gain control over its assets and operations. The international accounting standards governing business combinations are IFRS 3 concerning Business Combinations. In Indonesia, business combinations are regulated in PSAK 22. IFRS 3 and PSAK 22 are relatively new standards to be applied in Indonesia, besides that these standards are quite complicated to apply to companies that carry out business combinations, therefore there are still few researchers who are interested in researching application of IFRS 3 especially in Indonesia. This research was conducted to analyze the application of IFRS 3 and PSAK 22 concerning Business Combinations according to decision theory studies with case studies on companies in Indonesia that carry out business combination activities, specifically PT PP Properti Tbk, PT Ciputra Development Tbk, and PT Kimia Farma (Persero) Tbk. This research was conducted using a comparative qualitative analysis method through case studies on three companies listed on the Indonesia Stock Exchange namely PT PP Properti Tbk, PT Ciputra Development Tbk and PT Kimia Farma (Persero) Tbk. The data used is secondary data in the form of company annual reports in 2017 and 2018. The data is processed using a qualitative descriptive analysis method to determine the impact of implementing IFRS 3 and PSAK 22 on companies. The results of the study show that the accounting treatment for business combinations at PT PP Properti Tbk, PT Ciputra Development Tbk, and PT Kimia Farma (Persero) Tbk is different, this is because the types of business combinations carried out by the three companies are different. The business combination carried out by PT PP Properti Tbk is an acquisition. Furthermore, the business combination carried out by PT Ciputra Development Tbk is a merger with entities under common control which is within the scope of PSAK 38. Then the business combination carried out by PT Kimia Farma (Persero) Tbk is the formation of a joint venture which is within the scope of PSAK 15. carried out by PT PP Properti Tbk is a business combination that is within the scope of IFRS 3 and PSAK 22. In the financial statements of PT PP Properti Tbk, presentations related to business combinations are in accordance with the implementation of IFRS 3 and PSAK 22 concerning Business Combinations.