Dylematy ujęcia ujemnej wartości godziwej aktywów netto zorganizowanej części przedsiębiorstwa przy połączeniu jednostek według polskich przepisów rachunkowości
Dilemmas in Recognising the Negative Fair Value of Net Assets in Business under Polish GAAP

Summary/Abstract: Objective: The Polish Accounting Act and other Polish GAAP does not define business as a business combination. This act enables the use of International Financial Reporting Standards but National Accounting Standard no. 4 provides some concepts that can be applied to define what a business is. The first aim of this paper is to apply this standard to precisely explain the term “business” in sense of Polish GAAP. Because of fair value assessment of the business in combination, such a business can have a negative income value, resulting in a negative fair value of net assets. The second aim of the article is to characterise Polish GAAP in the context of zero value of the acquiree’s assets at initial recognition.Research Design & Methods: The legal acts of Polish GAAP were read and analysed.Findings: On the basis of NAS 4, a business can be defined as combined assets with liabilities and reserves if they are assigned to assets and generate economic benefits as net cash flows from operating activities. The article further shows that Polish GAAP does not include the possibility of recognising negative fair value of business net assets even if the restructuring the assets should be revaluated. In Polish GAAP, the impairment of initial value of net assets and, at most, reverse of the impairment loss is assumed.Implications / Recommendations: For the proper accounting allocation of a business combination, the Polish Accounting Act must be completed. This would include providing a definition of the business as recognition method of negative fair value of net assets, resulting from the negative income value of those assets.Contribution: The paper contributes to Polish accounting some concepts of business on the basis of NAS 4. It also shows contradictions in the measuring of fair value of business that is valued at negative income in business combination.

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