Which of the following is NOT included in the cost of an acquired company? (applying section 19 of IFRS for SMEs)
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Which of the following is NOT included in the cost of an acquired company? (applying section 19 of IFRS for SMEs)
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- When the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.For fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl ected in shareholders’ equity?A . Th ey are not recognizedWhich of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…
- Which of the following would NOT be included in the acquisition cost?A. Share issue costs.B. Fair value of any shares issued.C. Fair value of contingent consideration.D. Fair value of assets transferred.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.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 statements is TRUE? O The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair value. O According to IFRS #3: Revised, cost directly attributable in effecting the business combination (e.g., finders' fee and other direct cost) must be charged to share premium. Transaction costs directly related to the issue of debt instruments are deducted from the fair value of the debt on initial recognition and are amortized over the life of the debt as part of the effective interest rate. Directly attributable transaction costs incurred issuing equity instruments are deducted from revenue. In net asset acquisition, gain on bargain purchase is recognized in the Profit or Loss of the acquirer (after reassessment) if the consideration transferred is more than the fair value of net assets acquired.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.True or False Pls indicate if the statements are True or False. 1. All allocated excess/purchase differentials are amortized. 2. Allocated excess/purchase differential amortizations are the allocation over time of the difference between the market value and the book value of the subsidiary’s assets and liabilities at the acquisition date. 3.
- 6. What is the proper treatment for noncash asset received from a non-stockholder? Group of answer choices a. The share premium shall be credited for the fair value of the noncash asset. b. The share premium shall be credited for the book value of the noncash asset. c. The income account shall be credited for the fair value of the noncash asset. d. The income account shall be credited for the book value of the noncash asset.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.1. Which of the following may be measured subsequently at amortized cost?a. None of theseb. A non-derivative equity instrumentc. A derivalived. A non-derivative debt instrument 2. An investment in equity instrument may not be classified as a financial asset subsequently measured ata. Fair value through other comprehensive incomeb. Amortized costc. Fair value through proft or lossd. None of these 3. Significant influence isa. The contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.b. The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.c. The power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.d. Deemed to exist when the investor is exposed, or has rights, to variable returns from its involvement with the…