How is a goodwill in a business combination measured according to PFRS 3? Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree plus identifiable net assets acquired. O Consideration transferred plus amount of non-controlling interest minus identifiable net assets acquired. Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree minus identifiable net assets acquired. Consideration transferred plus amount of non-controlling interest plus fair value of previously held interest in the acquiree minus identifiable net assets acquired.

How is a goodwill in a business combination measured according to PFRS 3? Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree plus identifiable net assets acquired. O Consideration transferred plus amount of non-controlling interest minus identifiable net assets acquired. Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree minus identifiable net assets acquired. Consideration transferred plus amount of non-controlling interest plus fair value of previously held interest in the acquiree minus identifiable net assets acquired.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 16MCQ

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How is a goodwill in a business combination measured according to PFRS 3? a. Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree minus identifiable net assets acquired. b. Consideration transferred plus amount of non-controlling interest minus identifiable net assets acquired. c. Consideration transferred plus amount of non-controlling interest plus carrying value of previously held interest in the acquiree plus identifiable net assets acquired. d. Consideration transferred plus amount of non-controlling interest plus fair value of previously held interest in the acquiree minus identifiable net assets acquired.
Given the following information, how is goodwill from a business combination computed under PFRS (IFRS) 3? A = Consideration transferred; B = Non-controlling interest in net assets of subsidiary; C = Previously held equity interest; D = Fair value of net identifiable assets of subsidiary; % = Percentage of ownership acquired by the parent in the subsidiary a. A – (D x %) b. A+B+C-D c. (A+C) – (D x %) d. (A+B) – [(D x %) – B]
In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss
In a business combination, an acquirer's interest in the fair value of the net assetsacquired exceeds the consideration transferred in the combination. Under PFRS3 Business Combinations, the acquirer should A. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in othercomprehensive income B. recognize the excess immediately in other comprehensive income C. recognize the excess immediately in profit or loss D. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in profit or loss
In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under IFRS 3 Business Combinations, the acquirer should a. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss b. recognize the excess immediately in other comprehensive income c. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income d. recognize the excess immediately in profit or loss
How is goodwill or gain from bargain purchase computed? The difference between the consideration transferred, including non-controlling interest in the acquiree, and the acquisition-date fair value of net identifiable assets acquired. The excess of the acquisition-date fair value of net identifiable assets acquired and there carrying amounts in the acquiree's books. The difference between the sum of (a) consideration transferred; (b) non-controlling interest in the acquiree; and (c) acquisition-date fair value of the acquirer’s previously held equityinterest in the acquiree; and the acquisition-date fair value of net identifiable assets acquired. The difference between the purchase price and the acquisition-date fair value of net identifiable assets acquired.
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.
A business combination resulting to a goodwill is accounted using acquisition method. In the consolidated balance sheet at the date of acquisition, which of the following statement about retained earnings (RE) is TRUE? A. RE is equal to RE of the acquirer plus unadjusted net income of the acquiree. B. RE is equal to RE of the acquirer only. C. RE is equal to the sum of the RE of the acquirer and acquiree. D. RE is equal to RE of the acquirer plus adjusted income of subsidiary net of minority interest in subsidiary’s net income.
In a business combination achieved in stages, if the acquisition date fair value of the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities of the acquiree is higher than the aggregate of the (1) acquisition date fair value of the consideration transferred by the acquirer; (2) amount of noncontrolling interest measured at fair value or proportionate share; and (3) acquisition date fair value of acquirer's previously held equity interest in the acquire, the difference shall be accounted for by the acquirer in its consolidated statement of financial position as:A. GoodwillB. Deduction directly to retained earningsC. Expense as incurredD. Gain on bargain purchase
S1: Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be accounted for goodwill. S2: With an acquisition, direct and indirect expenses are considered a par of the total cost of the acquired company. Both statements are Only S1 is Only S2 is Both statements are 2. Following the completion of a business combination in the form of a statutory consolidation, what is the balance in the new corporation’s Retained earningsaccount? The acquirer retained earnings accountbalance Thesum of the acquirer and acquiree retained earnings account The acquiree retained earnings accountbalance Zero 3. S1: The acquisition-related costs in a business combination to be expensed immediately include cost of issuing debt securities. S2: In a business combination any “gain on bargain purchase” shall be recognized in other comprehensive income. Only S2 is Both statements are Both statements…
Which of the following is not an application of the acquisition method?a) Measuring the consideration transferred at fair value.b) Determining the acquisition date which is the date the acquirer obtains control over acquiree.c) Identifying the acquirer which is the entity that obtains control over another business in a business combination.d) Measuring the non-controlling interest at the NCI’s proportionate share in the acquiree’s net identifiable assets or fair value, whichever is higher.
Which of the following is not considered in the determination of Total Assets after business combination? Group of answer choices a.Book value of the acquirer’s total assets. b.Fair value of the acquiree’s total assets. c.Expenses that are actually paid in relation to business combination d.Contingent consideration