On July 1, 2019, PAPA COMPANY acquired 100% of the outstanding shares of MAMA COMPANY for P200 million. At the acquisition date, the carrying amount of MAMA's net assets was P150 million. At the acquisition date, a provisional fair value of P 170 million was attributed to the net assets. An additional valuation received on 31 May 2020 increased this provisional fair valuation to P185 million and on 31 July, 2020, this fair value was finalized at P190 million. A) What amount should PAPA present for goodwill in its statement of financial position at 31 December 2019 according to IFRS 3 Business Combinations? B) Journal entry to record the business combination and the necessary adjustments.

On July 1, 2019, PAPA COMPANY acquired 100% of the outstanding shares of MAMA COMPANY for P200 million. At the acquisition date, the carrying amount of MAMA's net assets was P150 million. At the acquisition date, a provisional fair value of P 170 million was attributed to the net assets. An additional valuation received on 31 May 2020 increased this provisional fair valuation to P185 million and on 31 July, 2020, this fair value was finalized at P190 million. A) What amount should PAPA present for goodwill in its statement of financial position at 31 December 2019 according to IFRS 3 Business Combinations? B) Journal entry to record the business combination and the necessary adjustments.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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