Business mergers are an integral part of the modern economy. They are realized through the purchase of a property or an equity share, whether it is an acquisition of the whole company or only one part. If a business combination occurs, the parent company is required to prepare consolidated financial statements for the company. The topic of this paper is accounting for business mergers. The concept of business mergers, types of business mergers, and their strategies are elaborated. The financial reporting of a business combination is followed by the preparation of consolidated financial statements. The rules for their preparation are set out in International Financial Reporting Standards and Croatian Financial Reporting Standards The consolidation accounting procedures and consolidation with pozitive goodwill and negative goodwill are dealt with in a thematic and practical way.