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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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.
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
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
The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Cost
In a stock acquisition that results to goodwill, the acquirer should classify it in its separate financial statements as a/an: a. Equity b. Asset c. Liability d. None of the above
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
How should negative goodwill be shown on the consolidated financial statements of the acquirer? Group of answer choices As a liability on the statement of financial position As a loss on the statement of comprehensive income As a separate amount under shareholders' equity on the statement of financial position As a gain on the statement of comprehensive income
In a business combination, goodwill is defined as the excess of acquisition cost over the a. fair value of assets acquired. b. fair value of assets acquired less the liabilities assumed. c. net book value of assets acquired. d. book value of assets acquired less the liabilities assumed.
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.
Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer choices a.When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company. b.In an acquisition when the value of all assets and liabilities cannot be determined. c.When any bargain purchased is created d.In a combination created in the middle of the fiscal year
Which of the following is not an application of the acquisition method? a. Measuring the non-controlling interest at the non-controlling interest’s proportionate share in the acquiree’s net identifiable assets or fair value, whichever is higher. b. Measuring the consideration transferred at fair value. c. Identifying the acquirer which is the entity that obtains control over another business in a business combination. d. Determining the acquisition date which is the date the acquirer obtains control over acquiree.