Statement I: Gain on bargain purchase is included in the consolidated balance of sharehol equity at the date of acquisition. Statement II: For business combination for SMES, all business combination expenses, direc indirect, and share-issue costs are deducted in the consolidated balance of shareholders' equity at the date of acquisition. * O False, True O True, False O True, True O False, False

Statement I: Gain on bargain purchase is included in the consolidated balance of sharehol equity at the date of acquisition. Statement II: For business combination for SMES, all business combination expenses, direc indirect, and share-issue costs are deducted in the consolidated balance of shareholders' equity at the date of acquisition. * O False, True O True, False O True, True O False, False

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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S1: The acquisition-related costs in a business combination to be expensedimmediately include cost of issuing debt securities. S2: In a business combination any “gain on bargain purchase” shall be recognized in other comprehensive income. A. Only S1 is correct.B. Only S2 is correct.C. Both statements are incorrect.D. Both statements are correct.
Gain on Bargain Purchase treated as other income in a business combination should be: a. Credited to the income account of both acquirer and acquire b. Credited to the share premium account of the acquirer c. Credited to a deferred credit account d. Credited to the income account of the acquirer
Statement I: Gain on bargain purchase is included in the consolidated balance of shareholders’ equity at the date of acquisition.Statement II: For business combination for SMEs, all business combination expenses, direct, indirect, and share-issue costs are deducted in the consolidated balance of shareholders’ equity at the date of acquisition. a. False, True b. False, False c. True, True d.True, False
Which statement is true in relation to business combination achieved in stages? a. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in profit or loss. b. The pre-existing interest shall be remeasured at fair value with any resulting gain or loss recognized in retained earnings. c. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in other comprehensive income. d. The pre-existing interest shall not be remeasured.
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
Statement I: In a business combination achieved in stages, the resulting gain or loss from the remeasurement of the acquirer’s previously held equity interest to its acquisition-date fair values shall be recognize in profit or loss or other comprehensive income.Statement II: The measurement period shall not exceed one year from the acquisition date. a. True, False b. False, False c. True, True d. False, True
In the cost method of acquisition income is recognized only when the subsidiary declares dividends Select one: True False
1. Shares issued in connection with business combination are recorded at: A discount A premium Fair value Par value 2. Indirect costs related to acquisition of another entity is treated as An expense An investment account Share capital Share premium 3. The cost of registering equity securities in a business combination should be capitalized debited to share premium expensed
Which of the following statements about post-acquisition earnings is incorrect? А. They are the earnings produced subsequent to the acquisition date by members of the group. В. They form part of earnings of the economic entity. С. They are eliminated against the parent's earnings, in a similar fashion to pre- acquisition earnings. D. They form part of earnings of the economic entity and they are eliminated against the parent's earnings, in a similar fashion to pre-acquisition earnings.
When a contingent consideration arising from a business combination is classified as equity, how is any change in its fair value accounted for if the difference arises due to a change in circumstances? Multiple Choice As a memorandum entry indicating that additional shares hed been isued, As an edjustment to an estimate included in the determination of net income. As an adjustment to consolidated contributed surplus. As an adiustment to the consideration naid for the subsidiarv
Statement I: For each business combination, an acquiree is always identified.Statement II: The acquisition date is the date where the acquiree obtains control over the acquirer. a. True, False b. True, True c. False, True d. False, False
Statement 1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in profit or loss. Statement 2: If a new entity is formed to issue equity interests to effect a business combination one of the combining entitites that existed before the combination shall be identified as the acquirer. Which statement/s is TRUE?