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 shall I. 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.

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

Step 5. Determining goodwill or a gain on bargain purchase. At the acquisition date, the acquirer should recognize goodwill arising in a business combination. Goodwill is measured as the excess of (a) over (b) below: (a) the fair value of purchase considerations/cost of business combination transferred by the acquirer; (b) the net amount of identifiable assets acquired and the liabilities assumed at the acquisition-date. The excess of the cost of business combination over the fair value of net assets acquired represents goodwill. After initial recognition, goodwill is not subject to amortization. The standard-setting bodies consider that the useful life of acquired goodwill and the pattern in which it diminishes are not possible to predict, and thus the amount of goodwill amortized in any given period is an arbitrary estimate. Amortizing goodwill over an arbitrary period fails to provide useful information. Therefore, goodwill should not be amortized; rather it should be subject to an…