Previously held interest at the date of acquisition shall be measured at: O Acquisition cost O Carrying amount O Fair value O Proportionate in the acquiree's identifiable net assets O Historical cost
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- 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.How is goodwill or gain from bargain purchase computed? Group of answer choices a. 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 equity interest in the acquiree; and the acquisition-date fair value of net identifiable assets acquired. b. The excess of the acquisition-date fair value of net identifiable assets acquired and there carrying amounts in the acquiree's books. c. The difference between the consideration transferred, including non-controlling interest in the acquiree, and the acquisition-date fair value of net identifiable assets acquired. d. The difference between the purchase price and the acquisition-date fair value of net identifiable assets acquired.Any excess of the fair value over book value attributable to land on the date of acquisition is to be: a. allocated to other identifiable assets. b. capitalized and amortized. c. charged to Retained Earnings on the date of acquisition. d. taken into income when the Land is sold.
- At acquisition date the net assests of the acquired subsidairy are included in the consolidated financial statement at their acquisition date fair value. However most of the parent assets and liabilities are measured on an historical cost basis . Is this Consistent ? Explain.The cost of intangible asset acquired in business combination is recognized by entity in its book at: a. Cost of acquisition date b. Either at cost or fair value at acquisition date c. Fair value at acquisition date d. Fair value at end of the reporting period1. How much is the fair value of the net assets of Sub? 2. How much is the goodwill/(gain from bargain purchase) at the date of acquisition? 3. How much is the total assets at the date of acquisition?
- Which of the following statements is TRUE? a. The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair value. b. Transaction costs directly related to the issue of debt instruments are deducted from the fair value of the debt on initial recognition and are amortized over the life of the debt as part of the effective interest rate. Directly attributable transaction costs incurred issuing equity instruments are deducted from revenue. c. In net asset acquisition, gain on bargain purchase is recognized in the Profit or Loss of the acquirer (after reassessment) if the consideration transferred is more than the fair value of net assets acquired. d. According to IFRS #3: Revised, cost directly attributable in effecting the business combination (e.g., finders’ fee and other direct cost) must be charged to share premium.The cost of land usually includes all of the following excepta. commission related to acquisitionb. cost of surveyc. property tax after the date of acquisition assumed by the purchaserd. property tax up to the date of acquisition assumed by the purchaserS1: Under the acquisition method, if the fair values of identifiable net assetsexceed the value implied by the purchase price of the acquired company, theexcess should be accounted for goodwill. S2: With an acquisition, direct andindirect expenses are considered a par of the total cost of the acquiredcompany. A. Only S1 is correct.B. Both statements are correct.C. Both statements are incorrect.D. Only S2 is correct.
- A gain on a bargain purchase is A. Recognized in profit or loss in the year of acquisitionB. Amortized in profit or loss over the lower of its legal life and estimated useful lifeC. Recognized in profit or loss in the year of acquisition but only after reassessment of the assets acquired and liabilities assumed in the business combinationD. None of the aboveS1: In an acquisition where the acquirer pays cash for the acquiree assets, the book value of the acquiree is to be used for valuation. S2: In acquisition of assets for assets, the ownership structure of the acquiree does notchange Both statements are Only S2 is Only S1 is Both statements are 2. If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets, the excess should be Allocatedgoodwill Allocated to reduce long-livedassets Allocated to reduce any previously recorded goodwill and classify any remainder as an ordinary Allocated to reduce current and long-livedassetsInvestment property includes all of the following, EXCEPT:A. For sale in the ordinary course of businessB. Land held for capital appreciationC. For use in production of goods and services and for amdinistrative purposesD. Land held for currently undetermined use