Discuss about the Content of Business Combination Disclosure Level.
In current, each and every organization is making efforts to expand its business at the global level. All the business organizations are adopting and implementing numerous attractive strategies to grow their businesses in an effective and a more comprehensive manner. Moreover, the organizations are also taking help of mergers & acquisitions, and joint venture to spread out their businesses. In current, business combination is also an effective way to grow business for the business organizations. This research essay would be helpful to comprehend the concepts of business combination. Moreover, this essay would also be useful to understand the importance of business combination to the business organizations.
In today’s more complex and challenging business era, business combination has become a common way to companies in order to grow in size. Moreover, it is not a type of joint venture and merger & acquisition. Business combination is different from joint venture and merger & acquisition. For case, a business combination refers as the contract in which the acquirer gets hold of control of another business (Loftus, Leo, Picker, Wise, and Clark, 2012). Along with this, business combinations are considered as a general way for businesses to grow up in size in preference to grow business all the way through internal activities.
Furthermore, business organizations take help of business combination due to several reasons. For case, the elimination of the competition among different firms because of hard combination the rate of profit decreases is one of the major causes of business combination. It is because of the business combination plays a significant role in order to increase the rate of profit and to reduce the competitions among different organizations in an effective and a more comprehensive manner (Shalev, 2009). In addition to this, in current, capital or fund is a major problem for the business organization. In this situation, business combination reduces the problem related to funds and also provides capital for the growth of the organizations. Moreover, business combination plays a significant role in order to remove the problems related to the management also helpful in the better management of the firms.
In addition to this, business combination is used by the business organizations as a strategic approach to integrate various business activities. For case specific business activities, business process, and methods are integrated within the business process that provides competitive scope over the competitors (Kouser and Saba, 2011). In the same way, integrated set of activities and practices are linked with the overall business strategies to fulfill the end goals. For example, according to this approach of business combinations, innovative methods are used that enhance organizational efficiency and reduce various operational and administrative costs. In the same way, it provides tangible and intangible benefits not only to the organizations but also investors.
At the same time, business combination is also assisting the companies to fulfill their strategic and long term objectives along with the economic and financial goals. For example, as per the principles of business combinations, two or more business firms together and shares their ideas, resources, and assists within each other and fulfills their economic goals in an effective and proper manner. Apart from this, it is also important to know that, this strategic approach also play a key role in developing the strong and positive corporate relations with each other (Walstra, Harrington, Drougas, and Pollastrini, 2012). In the same way, this approach is also helpful in developing trust among the companies and in reducing the various organizational challenges.
According to the approach of business combination two companies comes together and makes a solid combination to share their common goals and ides for the growth and success of the businesses. In addition to this, it also helps the companies or firms to enhance their organizational profitability by overcoming the several management and business issues. Additionally, business combination brings innovation, development, progress and improvement within the organizational wide range of business process and strategies. For example, with the effective use of business combination, business firms are generating more vales in the market for their key stakeholders (Capodaglio, Semprini, and Dangarska, 2015). Business combination also plays a key role in order to enhance the financial performance of the organizations not only in the local market but also in the global business era.
On the other hand, it is also analyzed that, business combination is also helpful to enhance organizational decision making power and to develop trusts among the key stakeholders. For example, business combination creates unique opportunities in the market for the companies and offers chances for the overall growth and success in an effective and proper manner. Moreover, with the help of this approach, companies are able to maintain their long run business relations at the global level (Al-Khadash, 2009). At the same time, it should also be noted down that, business combination is done by the organizations for the different business purpose and objectives. For example, reducing the cost, improving the profit, increasing the reputation, enhancing the level of sale, building strong image, improving the business value, offering more value to the stakeholders, innovation, and so on are the major reasons that are considered by the business firms for the business combinations. For example, business combination assists the organizations in utilizing a wide range of organizational resources and developing more business scope for the overall success and growth in the global business environment (Loftus, Leo, Picker, Wise, and Clark, 2012). In this way, it can be said that, business combination is a approach of growth for the business organizations.
On the basis of above discussion, it can be concluded that, business combination is one of the innovative, systematic, dynamic and strategic approach used by the business firms in order to improve financial and economic performance in the global business environment. In addition to this, it is also concluded that, business combination is also important to overcome different increased cost and manage the business resources effectively. Finally, it can be concluded that, today’s organizations must focus on the business combination approach in order to fulfill its long term objectives and strategic mission effectively.
Loftus, J., Leo, K., Picker, R., Wise, V., and Clark, K., 2012. Understanding Australian Accounting Standards. John Wiley & Sons.
Shalev, R. 2009. The Information Content of Business Combination Disclosure Level. THE ACCOUNTING REVIEW, 84 (1), pp. 239-270.
Kouser, R. and Saba, I., 2011. Effects Of business combination on financial performance: Evidence from Pakistan's banking sector. Australian Journal of Business and Management Research, 1(8), pp. 63-64.
Walstra, R., Harrington, S., Drougas, A. and Pollastrini, R., 2012. Integrating finance and accounting through a business combination assignment. Journal of Instructional Pedagogies, 7, pp.1-18.
Capodaglio, G., Semprini, L. and Dangarska, V.S., 2015. Business Combinations, Goodwill and Deferred Taxes: Evidences Emerging From a Comparative Analysis Between Italy and Bulgaria. Editorial Board Members, 14(5), pp.219-237.
Al-Khadash, H.A., 2009. Goodwill impairment after business combination among Jordanian shareholding companies. Journal of Accounting and Taxation, 11(2), pp.23-33.