Which of the following statements about a business combination is valid?
Q: Which of the following statements is TRUE? a. The acquirer shall measure the identifiable assets…
A: Answer:- a True Explanation:- The statement is true the acquirer must value the identifiable assets…
Q: Statement I: The estimated deficiency to unsecured claims represents the amount unrecoverable by the…
A: Liquidation means where the company decide to close out the operations , sell all the assets and…
Q: Choose the letter of the item NOT belonging or related to the group in computing for Non-Controlling…
A: Firstly let us understand consolidated statements. Consolidated financial statements are prepared…
Q: The acquisition-related costs in a business combination to be expensed immediately include cost of…
A: The cost of issuing debt securities is the acquisition-related cost which is expenses in the…
Q: How is goodwill or gain from bargain purchase computed? Group of answer choices a. The difference…
A: Solution How is goodwill or gain from bargain purchase computed Correct answer is option d) The…
Q: In a business combination, an acquirer's interest in the fair value of the net assets acquired…
A: A business combination is a transaction in which the acquirer obtains control of another business…
Q: Choose the correct. When negotiating a business acquisition, buyers sometimes agree to pay extra…
A: The correct answer is Option (c).
Q: Acquisition accounting requires an acquirer and an acquirer to be identified for every business…
A: Business combination is the arrangement and agreement between two or more than two entities in which…
Q: Recording a write-down from an original partner’s capital of book value to its implied fair market…
A: Write down of capital implies reduction in the capital funded by a partner to the firm in the…
Q: Choose the correct. FASB ASC 805, “Business Combinations,” provides principles for allocating the…
A: Financial Accounting Standards Board (FASB): FASB is an independent 7 member board, of accounting…
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 of the following statements about a business combination is valid? The acquirer should…
A: The acquirer should recognise the net assets acquired and the fair value of consideration…
Q: Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and…
A: The process of derecognizing financial assets in which the entity fully transfers the asset and all…
Q: Which is incorrect concerning the date of exchange in a business combination? * O The acquisition…
A: 1) The acquisition date is the date on which the acquirer effectively obtains control of the…
Q: Which of the following is not deductible from business income? Group of answer choices Casual…
A: Business income is earned revenue that includes all money generated by an entity's operations.…
Q: In a business combination in which the total fair value of the identifiable assets acquired over…
A: As per IFRS 3 Business combination The core Principles of business combination states that When…
Q: Examples of when an entity has retained substantially all the risks and rewards of ownership of…
A: Following is the example of entity has retained substantially all the risk and rewards of ownership.
Q: Which of the following is not an application of the acquisition method?
A: Answer: d) Measuring the non-controlling interest at the NCI’s proportionate share in the acquirer’s…
Q: Which of the following statements concerning the different types of hedging transactions is…
A: The Correct Answer is Option "C" i.e. In hedging transaction which is undesignated, unrealized…
Q: Which of the following is true? B. The agent is expected to carry out an agency although its…
A: Agency is the contract entered between two parties namely agent and principal in which agent is…
Q: How is a contingent liability accounting for in a business combination by the acquirer under IFRS…
A: Contingent liabilities are those liabilities which has probability of chance to become a liability…
Q: Assume that a business is headed for certain bankruptcy and it is evident that its liabilities…
A: Generally Accepted Accounting Principles (GAAP) or US GAAP are the collection of accounting…
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…
Q: When an investment ceases to be an associate, the fair value of the investment at the date when it…
A: Investment is the amount saved by the investor in order to earn regular income as well as get the…
Q: Restructuring provisions Are generally not recognized as part of business combination unless the…
A: Restructuring provisions means provisions for estimated cost of reorganisation of a company at the…
Q: When inventory is held on consignment it should be? -Derecognized -Reported as cost of goods…
A: As per guidelines, Only one question is answered when another question is not interlinked with the…
Q: Which of the following accounting treatments for costs related to business combination is incorrect?…
A: The cost related to business corporation, also known as pre incorporation expenditure, are treated…
Q: true or false ___________ if the fair value of the asset given u[ in exchange transaction that has…
A: Fair market value: It is the value of the fixed asset on which a particular asset is being sold in…
Q: When negotiating a business acquisition, buyers sometimes agree to pay extra amounts to sellers in…
A: Definition: Contingent liability: This is an uncertain obligation that might be incurred on a…
Q: Which of the following statements is TRUE? O The acquirer shall measure the identifiable assets…
A: As per IFRS 3 Acquisition Method shall be used for accounting businees combination. As per the IFRS…
Q: Which of the following is correct? A. The noncontrolling shareholders' claim on the subsidiary's…
A: The question is related to Consolidation.
Q: The acquirer shall recognize separately the acquiree's identifiable assets, liabilities and…
A: As per the provision in IAS37, contingent liability is a liability which depends on happening of…
Q: Which statement is true in relation to business combination achieved in stages? a. The pre-existing…
A: A business combination achieved in stages is called as a step acquisition
Q: goodwill or gain from bargain purchase computed
A: First option is wrong because non-controlling interest is not considered in determining the goodwill…
Q: Which of the following is not an important factor to assess when identifying appropriate precedent…
A: The Precedent analysis is a valuation technique in which the past Merger and Acquisition…
Q: PFRS 3 requires that all business combination be accounted for using a. the pooling interest…
A: PFRS 3 is a business combination brief on accounting of acquiring business company obtains control…
Q: Which of the following is not true with regard to a business combination accomplished in the form of…
A: This is the question of parent Company and subsidiary company. Parent company has controlling…
Q: A. For an asset, derecognition normally occurs when the entity loses control of all or part of the…
A: Derecognition means derecognizing the assets or liability where some predefined conditions met.
Q: A contingent liability assumed in a business combination: a. Is not accounted for by the acquirer…
A: Contingent liability: The contingent liability is not treated as a liability of the company on the…
Q: In the final settlement, of the contingent consideration, which of the following statements is…
A: I. Contingent consideration classified as equity the amount shall be measured upon settlement and…
Q: What should be done with the transaction on August 2019? a. Disclose as provision since the…
A: As per IFRS 37 A provision is present obligation from past event and it is probable that outflow of…
Q: Which of the following is incorrect regarding measurement period? a. If the initial accounting for…
A: Measurement period refers to the one year period that the variable hour employee's weekly measured…
Q: 1) Merchandise invested by an entity under a joint operation agreement should include an entry of…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: The sale and distribution of the assets of a business on its termination is Group of answer choices…
A: Answer is liquidation
Q: Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer…
A: Introduction:- As per IFRS 3 deals Business Combinations. Business combinations means acquirer…
Q: Which of the following is/are true regarding goodwill achieved through acquisition as part of…
A: Goodwill is referred to as intangible non-current asset of the business. In the case, the goodwill…
Q: The “excess of the acquirer’s interest in the net fair value of acquiree’s identifiable assets,…
A: The parent entity acquires control in the subsidiary entity by acquiring their net assets in…
Q: Choose the correct. When does gain recognition accompany a business combination?a. When a bargain…
A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.
Which of the following statements about a business combination is valid?
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- Which of the following statements regarding the accounting for business combinations is false? Review Later The acquirer in a business combination will anly recognize the labilities assumed if they meet the definition of liabilities and are part of the business combination transaction. Under the acquisition method, the identifiable assets acquired during a business combination are measured at their acquisition- date fair values. Goodwill is the difference between the consideration transferred by the acquirer to the acquiree and the fair value of identifiable assets acquired. The identifiable assets acquired, liabilities assumed, and noncontrolling interest in the acquiree are recognized separately from the goodwill arising out of a business combination.A contingent liability assumed in a business combination: a. Is not accounted for by the acquirer if the contingent liability has an improbable outflow of economic resources. b. Is recognized even if it has an improbable outflow of economic resources for as long as there is present obligation and the fair value of the obligation can be measured reliably c. Is recognized only if there is present obligation, probable outflow of economic resources, and can be measured reliably. d. Are not accounted for by the acquirer if the contingent liability has an improbable outflow of economic resources and recognized only if there is present obligation, probable outflow of economic resources, and can be measured reliably.If the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the acquirer shallI. Reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the combination.II. Recognize immediately in retained earnings any excess remaining after the reassessment. a. II only b. Both I and II c. I only d. Neither I nor II
- PROBLE other financial assets. associates and joint ventures. delivering cash or another financial asset. However, Entity A's not sufficient to justify offsetting because the rights and d. An intention to settle a financial asset and a financial 2 A contract that evidences a residual interest in the entity's assets after deducting all of its liabilities is classified as 4. Entity A issues an instrument that is re-purchasable by d. Liabilities arising from constructive obligations. Physical assets, such as inventories and PPE. and financial liability remain unaltered. Which of the following is within the scope of PAS 32? b. Contracts for the delivery or receipt of commodity and other non-financial items that can be settled net in cash or Financial assets in the form of investments in subsidiaries, 1. a. b. Co non-financial items that can be settled net in cash or Physical assets, such as inventories and PPE C. ssets after deducting all of its liabilities is classified as a. a financial…How shall an acquirer in a business combination account for the changes in fair value contingent consideration classified as equity instrument if the changes result from events after the acquisition date? a. The changes in fair value of contingent consideration classified as equity shall be recognized as gain or loss in profit or loss because they are not measurement period adjustments. b. Contingent consideration classified as equity shall not be re-measured and its subsequent settlement shall be accounted for within equity. c. The changes in fair value of contingent consideration classified as equity shell be retrospectively restated to beginning retained earnings because they are prior period error. d. The change in fair value of contingent consideration classified as equity shall be retroactively adjusted to goodwill/gain on bargain purchase because they are measurement period adjustments.A company should record an asset called "Goodwill" when it purchases another company for an amount that exceeds the fair value of the other company's identifiable net assets. Select one: True False
- Which of the following is not a criterion that must be met for an item to be classified as a liability? A certain cash payment will occur in the future. A sacrifice will require the entity’s assets or services. There is a probable future sacrifice. There is a present obligation that results from a past transaction.If an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.What does the Conceptual Framework state about derecognition?
- What should be done with the transaction on August 2019? a. Disclose as provision since the occurrence is probable. b. Recognize as provision since it is probable that Buwis Buhay will lose the case. c. Disclose as contingent asset because even if it is probable that the company will be successful, contingent asset is never recognized unless realized. d. Recognize as contingent liability since it is probable that Buwis Buhay will be indebted.When an investment ceases to be an associate, the fair value of the investment at the date when it ceases to be an associate: Is regarded as its cost on initial recognition as a financial asset. Is regarded as its fair value on initial recognition as a financial asset. O Is regarded as its fair value on initial recognition as a financial liability. O Is regarded as its amortized cost on initial recognition as an investment.In the final settlement, of the contingent consideration, which of the following statements is valid?I. If the contingent consideration is classified as equity, the amount shall be measured upon settlement and recognized as part of profit and loss.II. If the contingent consideration is classified as financial liability, the amount shall be measured at fair value upon settlement with any gain or loss recognized as part of profit and loss. a. I only b. Both I and II c. II only d. Neither I nor II