It is a type of business combination wherein an investor, having an existing involvement in the investee, acquires additional investment in order to obtain control over the investee. a. Business combination achieved by contract alone b. Business combination achieved by mere exchanges of equity interests c. Business combination achieved in stages d. Baby step combination
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- This distinguishes a business combination from other types of investment transactions. a. Obtaining of control b. Acquisition of assets c. All of these d. Acquisition of stocksWhich partners in a business have limited risk only to their investment? a. General partners b. Limited partners c. Active partners d. International partners1. Kind according to purpose (Choose 1) a. Horizontalb. Verticalc. Product Extentiond. Market Extensione. Congenericf. Conglomerate 2. Kind according to approach to the target firm (Choose 1)a. Friendlyb. Hostile 3. Kind according to acquisition mode (Choose 1) a. Cashb. Equity swapc. Mix of cash and equity swap
- The ability to combine skills and knowledge is anadvantage of aa. partnership.b. sole proprietorship.c. limited venture.d. an enterprise venture.e. a horizontal business.Matching type. Match these 4 investments into its corresponding definition below 1. Investment in trading securities. 2. Investment in long-term securities. 3. Investment in associates accounted for using the equity method. 4. Investment in subsidiary Definitions: a. to take advantage of flunctuations of prices in the market b. to exert significant influence over another entity so as to obtain benefits from its operations c. To earn investment income such as interest and dividend and additional source of liquidity such as selling investments as the need arises. d. For trading purposes, for speculative purposes, and to manage risk exposures if used as a hedging instrument e. to exert control over another entity thus enabling the investor to be entitled to variable returns from its involvement with the investee f. to earn rental income and for capital appreciation.In a business combination, the acquiree is the business that: Select one: a. Finances the business combination. b. Pays the acquisition consideration. c. The acquirer obtains control of in a business combination. d. Obtains control of the acquiree.
- Sub: Financial Accounting Sem.III 1) purchase consideration is the amount. a) payable by new firm to old firm b) payable old firms to partners c) payable by one tirm to another firm d) payable by existing firm to old firm 2) Excess of capital over debit side of Realisation Account is a) Book value b) Market value c) cost d) higher cost 3)Liabilitics assumcd by partners are a) Debited to realization Account b) Debited to revaluation Account c) Debited to partners capital Account d) Debited to P&L Account 4) Excess of net assets orer purchase consideration is a) Capital reserve b) Goodwill c) Capital d) drawingsWhich financial statement of a partnership reflects the profitability of the business? A. Statement of Financial Position B. Statement of Cash Flows C. Statement of Comprehensive Income D. Statement of Changes in Equity2. PAS 28 requires the use of the equity method. Under this method, an investment in associate or joint venture is initially at 2. PAS 28 requires the use of the equity method. Under a. method, an investment in associate or joint venture is initially b. and subsequently measured at Initial measurement 2. En in Subsequent measurement initial cost, adjusted for the investor's share in the investee's changes in a. fair value pe equity cost, adjusted for the investor's share in the investee's changes in equity b. cost C. fair value plus fair value transaction costs d. fair value plus initial cost, adjusted for the investor's share in the investee's changes in transaction costs equity 3.
- ACTIVITY & ASSIGNMENT 1. Look for a company that uses IFRS 11 or PFRS 11 2. Does the company classify it as joint operation or join venture? Which one is a better classification, joint operation or join venture? Provide your pros and cons. 3.In a joint venture, the partners donot act in common or act as an agent to one another . What does this mean . Give examples.In financial statements that are not separate financial statements, how should a joint venturer account for its interest in a joint arrangement? a. As an investment measured either at cost, fair value or using equity method b. As an investment measured using the equity method c. By using a T-account d. By recognizing its share in the assets, liabilities, income and expenses of the join venture and adding them line by line to similar accounts