Give a practical example of common control business combination.

Question

Accepted Answer

A common control business combination occurs when two or more businesses are under the control of the same parent company.

In a common control business combination, the parent company has the ability to direct the operating and financial policies of the businesses.
This type of combination typically involves businesses that are owned by the same group of shareholders or have the same management team.
Common control business combinations are not considered to be acquisitions because there is no change in control over the businesses involved.
An example of a common control business combination is when a parent company owns multiple subsidiaries that operate in different industries but are all controlled by the same group of executives.

Top KPMG India Statutory Audit Executive interview questions & answers