5. Explain the calculations of Goodwill and gain on bargain purchase in case of business combinations with suitable examples and imaginary values
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Q: Required: 1. Determine the goodwill or gain on bargain purchase from the above acquisition.
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A: The correct answer is Option (c).
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A:
Q: a. What is the goodwill or gain on bargain purchase arising from business combination? b. What total…
A: Goodwill is the excess value of Purchase consideration over the fair value of the net assets…
Q: Which one of the following statements correctly describes a characteristic of an entity purchase…
A: In this question we will explain that which is the correct option or a suitable characteristic of…
Q: Which of the following statements is true about goodwill? а. Goodwill may be recorded when the fair…
A: SOLUTION GOODWILL IS AN INTANGIBLE ASSET THAT IS ASSOCIATED WITH THE PURCHASE OF ONE COMPANY BY…
Q: Identify which one of the following is falling under the meaning of goodwill? a. The present value…
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Q: How much is the goodwill on the business combination, assuming both companies qualified as SME?
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A: Solution: When the Company Trades with an Investment in Associate, the Reported net income of the…
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A: Business combination is the agreement or combination between two or more than two companies in which…
Q: How does ‘Nature of business’ affect the value of goodwill of a firm ?
A: One of the factors that affect the goodwill value is the nature of business. If a firm is having…
Q: Explain the key steps in the acquisition method in accounting for business combination. Why Fair…
A: Business Combination- It is a situation when an entity acquires the business of other entity or…
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A: Non-monetary exchange is governed by Accounting for Non-monetary Transactions
Q: Which of the following statements regarding the accounting for business combinations is false?…
A: Although goodwill is the difference between the consideration transferred by the acquirer to the…
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A: Exchange means to give something for something else. All the other terminology is discussed below:
Q: What is one cost that is accounted for the same between the purchase method and acquisition method…
A: Purchase and Acquisition are two method to record the Investment made by an Entity. Purchase method…
Q: The unamortized excess account is a. the excess purchase cost that is attributable to goodwill. b.…
A: The unamortized excess account seems to be the account that is utilized to allocate the amount of…
Q: Th e initial measurement of goodwill is most likely aff ected by: A . an acquisition’s purchase…
A: Goodwill is an intangible asset which appears under the assets section of the balance sheet. The…
Q: Non cash consideration received from customer should be:
A: GIVEN Noncash consideration should be IS
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A: A business combination achieved in stages is called as a step acquisition
Q: Compute the goodwill (gain on bargain purchase).
A: The goodwill (gain on bargain purchase) is calculated as follows:Reference:
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Q: not a method of valuation of goodwil
A: Goodwill is the value of a business in the eyes of external parties. This shows the supremacy of the…
Q: HOW MUCH IS THE GOODWILL ON THE BUSINESS COMBINATION
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A: Step 1 A business combination is a transaction in which the acquirer obtains control of another…
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- What is the Goodwill (Gain on Bargain Purchase) ?For which of the following does IFRS for SMEs not provide a simplification of full IFRS?a. Goodwill.b. Borrowing costs.c. Development costs.d. Inventory.Explain the key steps in the acquisition method in accounting for business combination. Why Fair value is the rule?
- Choose the correct.For which of the following does IFRS for SMEs not provide a simplification of full IFRS?a. Goodwill.b. Borrowing costs. c. Development costs.d. Inventory.The reason goodwill is sometimes referred to as a master valuation account is because a. it represents the purchase price of a business that is about to be sold.b. it is the difference between the fair market value of the net tangible and identifiableintangible assets as compared with the purchase price of the acquired business.c. the value of a business is computed without consideration of goodwill and thengoodwill is added to arrive at a master valuation.d. it is the only account in the financial statements that is based on value, all otheraccounts are recorded at an amount other than their value.The amount for which an asset could be exchanged, a liability settled , or an equity instrument could be exchanged between knowledgeable parties is known as _________ a. Fair value cost principle b. Historical cost principle c. Futuristic cost principle d. Replacement cost Principle
- What is one cost that is accounted for the same between the purchase method and acquisition method Stock issuance costs in process research and development costs Legal and accountants fees Contingent consideration Bargain purchaseTh e initial measurement of goodwill is most likely aff ected by: A . an acquisition’s purchase priceHOW MUCH IS THE GOODWILL ON THE BUSINESS COMBINATION?
- Which of the following is/are true regarding goodwill achieved through acquisition as part of business combination? Where the acquirer was able to purchase the business at a discount, the excess of the market capitalization over the consideration transferred will be recognized in profit or loss. The acquirer shall recognize goodwill as of the acquisition date measured as the excess of the aggregate of the consideration transferred over the net of the fair values of all the assets acquired and the liabilities assumed Group of answer choices Both statements are true. None of these statements are true. 2 only. 1 only.Gain on Bargain Purchase treated as other income in a business combination should be: a. Credited to the income account of both acquirer and acquire b. Credited to the share premium account of the acquirer c. Credited to a deferred credit account d. Credited to the income account of the acquirer(Based on Appendix 9) Define purchase commitments. What is the advantage(s) of these agreements to buyers?