• FASB
• IASB
• IFRS 15
• M&A
• Revenue Recognition

Currently, M&A activities cross the domestic markets and dominate the international scenes, involving the participation of multiple agents: from investment banks to Private Equity, from managers and executives to shareholders. As these transactions can be structured in different ways, they depict a preferred form of corporate investment through which companies can incorporate, in whole or in part, another entity. Indeed, M&As have been well-received in the international landscape and the current trend is justified by the fact that this types of operations embody the right compromise to which companies resort to pursue several combined economic, strategic and cultural goals. Incidentally, the recurring undertakings of M&A mean that they can no longer be considered extraordinary transactions. The complexity of the M&A process offers cues of further reflections, casting doubt that the resulting advantages really overcome the undeniable drawbacks. Academic researchers have debated the question for some time, claiming that the final aim, the creation of value for shareholders, is not a foregone outcome. Although companies carefully assess the expected reciprocal benefits before choosing to combine, they should consider the risk of suffering a deterioration of their values, which could drag on for years.
In my dissertation I shall examine M&A activities, developing a more critical view focused on specific matters. The main issue on which the analysis is built up is the introduction of the new revenue recognition model, wide and complete guidance which may affect the modalities and the timing of the revenue accounting. During the last years, the accounting field has been marked by the progressive process of harmonisation, whose purpose is to realise a unique accepted set of accounting rules that can be applied by companies located in different countries. In this context, the recent adoption of the new recognition guidance has certainly not gone unnoticed.
IFRS 15/ASC 606 “Revenue from Contracts with Customers”, issued by the IASB on 28 May 2014 and entered in force in 2018 for most companies, represents the result of a close and productive activities of collaboration and development between the two existing bodies designed to set the accounting standards, the IASB (International Accounting Standard Board) and the FASB (Financial Accounting Standards Board) respectively.The joint initiative of eliminating the current accounting mismatch and converging on the accounting requirements and practises is an essential action to overcome any barriers and to promote the interaction and the fulfilment of transactions between highly competitive enterprises which intend to keep growing. The comparability of the financial statements is a key factor that facilitates the assessment of the participating entities and fosters the success of the negotiations.
Applying the new revenue recognition standard to M&As show the changes and the possible matters that can arise after the upgrade of this accounting principle.Therefore, companies that embarked M&As during the transition period to IFRS 15 have had to estimate in advance the possible effects on the agreement clauses and the post-acquisition measures.The theoretical study materialises in the colossal case of M&A occurred in 2018: the merger between AT&T and Time Warner, two corporations belonged to the Technology-Media-Telecommunication sector.