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?

Q: Statement I: The estimated deficiency to unsecured claims represents the amount unrecoverable by the…

A: Liquidation means where the company decide to close out the operations , sell all the assets and…

Q: Key questions to consider when determining the appropriate consolidation adjustment entries include…

A: Consolidation adjustment entry is the accounting entry that is to be made for consolidating the…

Q: Choose the letter of the item NOT belonging or related to the group in computing for Non-Controlling…

A: Firstly let us understand consolidated statements. Consolidated financial statements are prepared…

Q: What is the proper treatment for noncash asset received from a non-stockholder? Group of answer…

A: Accounting entry to be made for noncash asset received from a non-stockholder: Debit Noncash Assets…

Q: an initial recognition an entity may make an irrevocable election to present in other comprehensive…

A: According to the accounting stantdard if an entity makes an investment and shows it in in other…

Q: If the acquirer's interest in the net fair value of the identifiable asset liabilities exceeds the…

A: In extremely rare circumstances, an acquirer will make a bargain purchase in a business combination…

Q: How is goodwill or gain from bargain purchase computed?  Group of answer choices a. The difference…

A: Solution How is goodwill or gain from bargain purchase computed Correct answer is option d) The…

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

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: Restructuring provisions

A: Investment: It refers to the process of using the currently held excess cash to earn profitable…

Q: The fair value method of accounting for stock

A: As per IFRS 9 , Equity investments should be measured through fair value through profit and loss…

Q: Which of the following is not considered in the determination of Total Assets after business…

A: In business combination , following are considered for determination of total assets : 1. Fair…

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: 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: In a business combination in which the total fair value of the identifiable assets acquired over…

A: As per IFRS 3  Business combination  The core Principles of business combination states that When…

Q: When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In…

A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.

Q: n a restated set of financial statements prepared in accordance with the current cost accounting,…

A: Realized gain is the gain on sale of the asset where its cost price is less than the selling price.…

Q: Which of the following is not considered in the determination of Total Assets after business…

A: In business combination , following are considered for determination of total assets : 1. Fair value…

Q: hen a firm disposes of a capital asset, the difference between the net book value of the asset and…

A: Basic Accounting Concept Capital gain or loss on transfer of assets

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: Which of the following is not an application of the acquisition method?

A: Answer: d) Measuring the non-controlling interest at the NCI’s proportionate share in the acquirer’s…

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: 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: Under PFRS 3, when is a gain recognized in consolidating financial information? a. In a combination…

A: Introduction:- The merger and purchase of several smaller enterprises into a few considerably bigger…

Q: When share options issued to employees are vested prior to the predetermined vesting date, the…

A: Solution: As per IFRS, fair value of the share-based payment, determined at the grant date, should…

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: If the acquirer’s interest in the net fair value of the identifiable assets, liabilities and…

A: The goodwill should be reassessed at the time of acquisition to check its accuracy. If any negative…

Q: true or false ___________ if the fair value of the asset given u[ in exchange transaction that has…

A: Fair market value: It is the value of the fixed asset on which a particular asset is being sold in…

Q: Using the acquisition method for a business combination, goodwill is generally defined as Select…

A: Using the acquisition method for a business combination goodwill is defined as the investment cost…

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: which statements is incorrect regarding for value measurements? a. fair value is normally the…

A: Fair value is the price that would be received to sell the asset or paid to transfer the liability…

Q: Which of the following statements is/are true about contingent consideration under the revised PFRS…

A: solution concept as pe the provision of PFRS 3 business combinations contingent consideration can be…

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: Statement I:  The equity securities issued as part of the consideration transferred shall be…

A: In the given case the statement given that is::: Statement I: The equity securities issued as part…

Q: A contingent liability assumed in a business combination: a. Is not accounted for by the acquirer…

A: Contingent liability: The contingent liability is not treated as a liability of the company on the…

Q: The price that would be received to sell an asset or paid to transfer a liability in an orderly sale…

A: In accountancy, an asset can be defined as a business item used for the purpose of running business.…

Q: If an entity has elected to use the fair value option for a financial liability; a. It is measured…

A: Liabilities: Liabilities are the obligations of an organization that an organization must pay in…

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: The identifiable assets acquired and liabilities assumed in a business combination are generally…

A: Consolidation: It can be defined as the process of combining or acquiring many smaller corporations…

Q: How should negative goodwill be shown on the consolidated financial statements of the acquirer?…

A: Introduction:- Negative goodwill arises, where one company (Acquirer company) purchases or acquires…

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

A: Step 1 A business combination is a transaction in which the acquirer obtains control of another…

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: Which of the following accounting methods is used to account for controlling interest​ investments?…

A: Consolidation Method: This investment accounting method is used for consolidating the financial…

Q: For fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl…

A: All assets purchased with an intention of sale and not for the purpose of operational utility are…

Q: Which of the following is/are true regarding goodwill achieved through acquisition as part of…

A: Goodwill is referred to as intangible non-current asset of the business. In the case, the goodwill…

Q: When a contingent consideration arising from a business combination is classifled as equity, how is…

A: Contingent Consideration Contingent consideration is the amount which was promised by the buyer to…

Q: In an acquisition where control is achieved and the fair value of the consideration transferred is…

A: Acquisition:-When assets of one company acquired by another company with some holding rights.

Q: Choose the correct. When does gain recognition accompany a business combination?a. When a bargain…

A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.

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.