When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In a combination created in the middle of a fiscal year.c. In an acquisition when the value of all assets and liabilities cannot be determined.d. When the amount of a bargain purchase exceeds the value of the applicable noncurrent assets (other than certain exceptions) held by the acquired company.

Q: What is a statutory merger?a. A merger approved by the Securities and Exchange Commission.b. An…

A: The correct answer is Option (d).

Q: S1: In the financial settlement of a contingent consideration classified as financial liability, the…

A: A business combination occurs when an entity acquires control over an organization. It can also be…

Q: In a transaction accounted for using the acquisition method where consideration transferred is less…

A: The acquisition method is used when a business is taken over by another business.

Q: Acquisition accounting requires an acquirer and an acquirer to be identified for every business…

A: Solution: An acquirer is a company/entity obtaining control over one or more businesses. Therefore…

Q: Choose the correct. What is a statutory merger?a. A merger approved by the Securities and Exchange…

A: Merger: It is a process or an agreement where two or more firms combine together to form one new…

Q: Since its enactment, PSAK 22: Business Combinations must be applied to all acquisitions. Explain how…

A: Solution of (a) A business combination is when a buyer takes control of another business by way of a…

Q: The acquisition-related costs in a business combination to be expensed immediately include cost of…

A: The cost of issuing debt securities is the acquisition-related cost which is expenses in the…

Q: Statement 1: In the financial settlement of a contingent consideration classified as financial…

A: The question is related to which Statement is correct.

Q: The existence of overvalued assets (when comparing book and market value) on the books of the entity…

A: In consolidation, the parent corporation prepares a worksheet to record the account balances of both…

Q: In a business combination, an acquirer's interest in the fair value of the net assets acquired…

A: A business combination is a transaction in which the acquirer obtains control of another business…

Q: Choose the correct. When negotiating a business acquisition, buyers sometimes agree to pay extra…

A: The correct answer is Option (c).

Q: 1: The preparation of consolidated financial statements after acquisition is materially different…

A: Statement 1 is correct as consolidated financial statements are prepared for the parent company who…

Q: The amount of goodwill (gain from a bargain purchase) resulting from the business combination is 2.…

A: Step 1: Calculation of Identifiable Net Assets of Subsidiary Company Particulars Amount  Amount…

Q: Choose the correct. What is the primary reason we defer financial statement recognition of gross…

A: a) When goods are transferred within the consolidated entity and such goods are unsold as on balance…

Q: a. What is the goodwill or gain on bargain purchase arising from business combination? b. What total…

A: Goodwill is the excess value of Purchase consideration over the fair value of the net assets…

Q: How shall an acquirer in a business combination account for the changes in fair value contingent…

A: Business combination is a form of arrangement or agreement between two or more than two entities in…

Q: Which is incorrect concerning the date of exchange in a business combination? * O The acquisition…

A: 1) The acquisition date is the date on which the acquirer effectively obtains control of the…

Q: Please answer the following questions relating to unrealized profit in a business combination. 1)…

A: Unrealized gains are prospective profits that exist on paper as a consequence of an investment. This…

Q: e following is a characteristic of a business combination that should be accounted for as an…

A: The acquisition is the that another company being merged with original company and two are joined…

Q: Which of the following statements is incorrect? For each business combination, one of the combining…

A: Business: A business is an organization entirely made for earning profits or for fulfilling social…

Q: Statement I:  During the measurement period, the acquirer shall prospectively adjust the provisional…

A: During the measurement period the acquirer shall retrospectively adjust the provisional amounts…

Q: Statement I: For each business combination, an acquiree is always identified. Statement I: The…

A: Solution Concept In the context of the business combination , the acquirer has to be identified to…

Q: Which of the following accounting treatments for costs related to business combination is incorrect?

A: Answer -    The Pre incorporation Costs shall not be capitalised. If shall be debited to Profit and…

Q: During the measurement period, which of the following may affect the amount of goodwill from…

A: Measurement period refers to the reasonable time period after the date of acquisition when acquirer…

Q: counts in the year of sale and must be eliminated by the parent company in determining its…

A: The correct answer is : a) A. Gains and losses appear in the parent-company accounts in the year of…

Q: entity discontinued an operation and disposed of the discontinued operation the transaction should…

A: Discontinued Operations are a part of the company operation which have been discontinued or shut…

Q: During the current year, an entity acquires another entity in a transaction properly accounted for…

A: If at the time of the acquisition, some of the information for valuing assets was incomplete and the…

Q: Which of the following statements is true about goodwill? O a. Goodwill may be recorded when it is…

A: Goodwill is recorded when one company acquires another in a business combination and amount of…

Q: Which of the following statements regarding the accounting for business combinations is false?…

A: Although goodwill is the difference between the consideration transferred by the acquirer to the…

Q: Which statement is incorrect regarding reclassification of financial assets? A. Reclassifications…

A: IFRS 9 talks about Reclassification of Financial Assets. IFRS 9 sets out certain criteria for…

Q: Restructuring provisions Are generally not recognized as part of business combination unless the…

A: Restructuring provisions means provisions for estimated cost of reorganisation of a company at the…

Q: When an entity sells a non-current asset at a profit to another entity within the same group, which…

A: Consolidation is the process in which parent company prepares financial statement with both parent…

Q: In a business combination, an acquirer's interest in the fair value of the net assets acquired…

A: It should be recognised as capital reserve in the statement of comprehensive income... The…

Q: what is the balance in the new corporation’s Retained earnings account?

A: Under IFRS -3 a business combination transaction is said to be closed when the net assets of the…

Q: When negotiating a business acquisition, buyers sometimes agree to pay extra amounts to sellers in…

A: Definition:   Contingent liability: This is an uncertain obligation that might be incurred on a…

Q: Goodwill recognized in a business combination must be allocated among a firm’s identified reporting…

A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…

Q: Choose the correct. According to the acquisition method of accounting for business combinations,…

A: While making merger amount will be paid to attorneys and accountants for the services provided by…

Q: A gain on a bargain purchase is A. Recognized in profit or loss in the year of acquisition B.…

A: Bargain Purchase means the acquisition of Assets at a value that is substantially less than their…

Q: Which of the following statements is true?   Multiple Choice   The pooling of interests for…

A: Solution: As per IFRS 3, "Acquisition method should be used for new business combinations"

Q: Choose the correct. An acquired firm’s financial records sometimes show goodwill from previous…

A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…

Q: Statement I:  For each business combination, an acquiree is always identified. Statement II: The…

A: Every business combinations (i.e.) when an acquirer obtains control over acquiree is accounted in…

Q: 1) Merchandise invested by an entity under a joint operation agreement should include an entry of…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: acquisition where there is an exchange of assets for assets, how does the ownership structure of the…

A: Acquiree Entity is the entity whose business is taken over by other entity.

Q: Which statement is incorrect regarding reclassification of financial assets? An entity shall…

A: As per IFRS 9, an entity does not restate any previously recognized gains, losses, or interest.

Q: Explain how purchase accounting is implementedin a merger. Does the accounting profession nowrequire…

A: Purchase accounting can be defined as the practice of revising the assets and liabilities of the…

Q: The prior period will be affected if during the current year the management of an entity decides to…

A: Prior period is the period before the current accounting year. Non current asset is the long term…

Q: During the measurement period, which of the following may affect the amount of goodwill from…

A: Measurement period is the period after the acquisition date in which acquirer can adjust the…

Q: Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer…

A: Introduction:- As per IFRS 3 deals Business Combinations. Business combinations means acquirer…

Q: This distinguishes a business combination from other types of investment transactions. Obtaining of…

A: Business combination is defined as the transaction under which the acquirer gains the control over…

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.