Legal and accounting aspects of mergers and divisions as types of business combinations in the Slovak Republic

Abstract

Mergers and divisions are a part of a broader  issue of certain types of business  joining into larger economic or legal units or division of business. This is known as business combinations in international accounting terminology. The aim of this paper is to comprehensively present and analyse the issue of mergers and divisions as types of  business combinations in the Slovak Republic from a legal and accounting point of view. The paper clarifies mergers and divisions transaction as possible types business combinations; explains the relationship between company being acquired and acquiring company because their understanding is necessary for the correct accounting solution of this transaction; informs about the legal context of  mergers and divisions to the extent necessary to explain the accounting context. The paper also presents a comprehensive accounting solution to this issue from the point of view of both company being acquired and acquiring company according to the currently valid accounting legislation.