Acquisition date

Why does it matter in a group?

The acquisition date is the day the parent obtains controlControlPower over a company, exposure to its variable returns, and the ability to use that power to affect those returns. Control makes the company a subsidiary and brings it into the consolidation.Open the glossary entry of the other company. It is not necessarily the day the contract is signed or the cash moves.¹ From that day the new subsidiarySubsidiaryA company that is controlled by another company, its parent.Open the glossary entry‘s income and expenses go into the group accounts, and its assets and liabilities are measured at fair value on that day (see fair value adjustmentFair value adjustmentAn adjustment made on consolidation to bring a subsidiary's identifiable assets and liabilities to fair value at the acquisition date.Open the glossary entry). The reserves it holds on that day are pre-acquisition reservesPre-acquisition reservesThe reserves a subsidiary held at the date it was acquired. They belong to the previous owners, so they are eliminated against the parent's investment and are not part of group reserves.Open the glossary entry. A wrong date moves profit from one month to another.

A small example

Zenvara gains control of Quillfern GmbH on 16 September 2026. Quillfern made a profit of EUR 90,000 evenly through September, which is GBP 76,050 at the average rate of 0.8450. The September group accounts include only the 15 days from 16 to 30 September, which is GBP 38,025 of that profit, and nothing earlier.