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- 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, 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 lossIf a revaluation of the subsidiary’s assets is performed on consolidation, the subsidiary’s assets are carried into the consolidated statement of financial position at: Select one: a. Net present value. b. Historical cost. c. Fair value. d. Current replacement cost.
- 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 lossA 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? Group of answer choices RE is equal to the sum of the RE of the acquirer and acquire. RE is equal to RE of the acquirer plus unadjusted net income of the acquire. RE is equal to RE of the acquirer plus adjusted income of subsidiary net of minority interest in subsidiary’s net income. RE is equal to RE of the acquirer only.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.
- 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 considerationa. Determine the goodwill or gain on bargain purchase from the above acquisition if the NCI is to be valued on a proportionate b. Determine the balance of the NCI in FC’s consolidated financial statements.Key questions to consider when determining the appropriate consolidation adjustment entries include the following except for: a. What has been recorded by the legal entities? b. What is the tax effect of the adjustments made? c . Does the transaction involve the parent entity selling assets to the subsidiary, or the subsidiary selling assets to the parent entity? d. Is this a prior period or a current period transaction?
- Statement I. Upon consolidation, the goodwill account should be debited in the elimination entry if the consideration transferred, previously held interest, and non-controlling interest are less than the fair value of net assets acquired.Statement II. In a net asset acquisition, the acquirer should recognize the goodwill as an asset in its separate financial statements. a. Both statements are true. b. Both statements are false. c. Statement I is true; Statement II is false. d. Statement I is false; Statement II is true.During the measurement period, which of the following may affect the amount ofgoodwill from business combination? A.New information regarding estimates in the contingent consideration that are not existing atthe date of acquisitionB.Nothing can affect the amount of goodwill.C.New information regarding estimates in the contingent consideration that are existing at thedate of acquisition.D.New information regarding estimates in the contingent considerationHow 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.
