Question 1

The identifiable assets acquired in a business combination may include which of the following?

Accepted Answer

A) goodwill 
B) trademarks 
C) patents 
D) both B and C 
A) goodwill 
B) trademarks 
C) patents 
D) both B and C D

Question 2

Goodwill is initially recorded as:

Accepted Answer

A) the net amount of the recognised identifiable assets acquired and liabilities assumed 
B) the excess of the net amount of the recognised identifiable assets acquired and liabilities assumed over the excess of the consideration transferred 
C) the excess of the consideration transferred over the net amount of the recognised identifiable assets acquired and liabilities assumed 
D) none of the above 
A) the net amount of the recognised identifiable assets acquired and liabilities assumed 
B) the excess of the net amount of the recognised identifiable assets acquired and liabilities assumed over the excess of the consideration transferred 
C) the excess of the consideration transferred over the net amount of the recognised identifiable assets acquired and liabilities assumed 
D) none of the above C

Question 3

Coolum Ltd acquired a business from Mudjumba Ltd on 1 July 2011 for a purchase consideration of $500 000 cash.At this date,the identifiable assets of Mudjimba Ltd had a fair value of $600 000 and the liabilities had a fair value of $70 000.Identify whether Collum Ltd should recognise goodwill or a gain on bargain purchase and the correct amount.

Accepted Answer

A) goodwill of $100 000 
B) gain on bargain purchase of $100 000 
C) gain on bargain purchase of $30 000 
D) goodwill of $30 000 
A) goodwill of $100 000 
B) gain on bargain purchase of $100 000 
C) gain on bargain purchase of $30 000 
D) goodwill of $30 000 C

Question 4

Explain the three elements of a business.

Accepted Answer

A business consists of inputs and proces

Question 5

AASB 3 specifically does not apply to which of the following?

Accepted Answer

A) the acquisition of an asset or group of activities that does not constitute a business 
B) the acquisition of an asset or group of activities that constitutes a business 
C) a transaction or other event in which an acquirer obtains control of one or more businesses 
D) all of the above 
A) the acquisition of an asset or group of activities that does not constitute a business 
B) the acquisition of an asset or group of activities that constitutes a business 
C) a transaction or other event in which an acquirer obtains control of one or more businesses 
D) all of the above

Question 6

Explain the process of recognising and measuring the identifiable assets and liabilities of the acquiree.

Accepted Answer

The third step involved in recognising a

Question 7

Which of the following statements is incorrect?

Accepted Answer

A) AASB 3 allows a period of time for the acquirer to obtain the information necessary to adjust,if necessary,any provisional estimates originally made 
B) provisional estimates may relate to the consideration transferred for the acquiree 
C) it may be necessary for an entity to make provisional estimates when initially recording a business combination in its accounts 
D) adjustments to provisional amounts for identifiable assets and liabilities are generally recognised through a revenues or expense in the profit and loss 
A) AASB 3 allows a period of time for the acquirer to obtain the information necessary to adjust,if necessary,any provisional estimates originally made 
B) provisional estimates may relate to the consideration transferred for the acquiree 
C) it may be necessary for an entity to make provisional estimates when initially recording a business combination in its accounts 
D) adjustments to provisional amounts for identifiable assets and liabilities are generally recognised through a revenues or expense in the profit and loss

Question 8

AASB 3 establishes principles and requirements for how the acquirer:

Accepted Answer

A) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination 
B) recognises and measures in its financial statements the identifiable assets acquired,the liabilities assumed and any non- controlling interest in the acquiree 
C) recognises and measures the goodwill acquired in the business combination or a gain from a bargain purchase 
D) all of the above 
A) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination 
B) recognises and measures in its financial statements the identifiable assets acquired,the liabilities assumed and any non- controlling interest in the acquiree 
C) recognises and measures the goodwill acquired in the business combination or a gain from a bargain purchase 
D) all of the above

Question 9

Before recognising a gain on a bargain purchase,the acquirer shall review the procedures used to measure the amounts that AASB 3 requires to be recognised at the acquisition date for which of the following:

Accepted Answer

A) the consideration transferred 
B) the non- controlling interest in the acquiree,if any 
C) the identifiable assets acquired and liabilities assumed 
D) all of the above 
A) the consideration transferred 
B) the non- controlling interest in the acquiree,if any 
C) the identifiable assets acquired and liabilities assumed 
D) all of the above

Question 10

The final step in the acquisition method is:

Accepted Answer

A) determining the acquisition date 
B) identifying the acquirer 
C) recognising and measuring the identifiable assets acquired,the liabilities assumed and any non- controlling interest in the acquiree 
D) recognising and measuring goodwill or a gain from a bargain purchase 
A) determining the acquisition date 
B) identifying the acquirer 
C) recognising and measuring the identifiable assets acquired,the liabilities assumed and any non- controlling interest in the acquiree 
D) recognising and measuring goodwill or a gain from a bargain purchase

Question 11

The AASB 3 disclosures requirements for each material business combination include:

Accepted Answer

A) details of acquired receivables 
B) a description of the factors that make up the goodwill recognised 
C) the percentage of voting equity interests acquired 
D) all of the above 
A) details of acquired receivables 
B) a description of the factors that make up the goodwill recognised 
C) the percentage of voting equity interests acquired 
D) all of the above

Question 12

Discuss the objectives of AASB 3.

Accepted Answer

The objective of AASB 3 is to improve th

Question 13

Which of the following statements is incorrect?

Accepted Answer

A) the acquisition date is defined as the date at which the acquirer obtains control of the acquiree 
B) the acquisition date is defined as the date at which acquirer obtains significant influence over the acquiree 
C) control indicates that the acquirer has the capacity to obtain benefits from the activities of the acquired entity or business 
D) the acquisition date represents the time at which the fair value of the acquisition consideration must be measured 
A) the acquisition date is defined as the date at which the acquirer obtains control of the acquiree 
B) the acquisition date is defined as the date at which acquirer obtains significant influence over the acquiree 
C) control indicates that the acquirer has the capacity to obtain benefits from the activities of the acquired entity or business 
D) the acquisition date represents the time at which the fair value of the acquisition consideration must be measured

Question 14

Identify the major disclosure requirements in AASB 3 for each material business combination occurring during the reporting period.

Accepted Answer

Some of the major disclosure requirement

Question 15

A non- controlling interest arises when:

Accepted Answer

A) the acquirer does not acquire 100% of the acquiree 
B) the acquirer acquires 100% of the acquiree 
C) the acquiree does not acquire 100% of the acquirer 
D) all of the above 
A) the acquirer does not acquire 100% of the acquiree 
B) the acquirer acquires 100% of the acquiree 
C) the acquiree does not acquire 100% of the acquirer 
D) all of the above

Question 16

Explain the accounting requirements for acquisition- related costs.

Accepted Answer

A question arises regarding the accounti

Question 17

Which of the following statements is correct?

Accepted Answer

A) for any business combination,one of the combining entities must be identified as the acquirer 
B) the acquirer is defined as the business or businesses the acquiree obtains control of in a business combination 
C) for any business combination,both of the combining entities must be identified as the acquirer 
D) the acquiree is the entity that obtains control of the acquirer 
A) for any business combination,one of the combining entities must be identified as the acquirer 
B) the acquirer is defined as the business or businesses the acquiree obtains control of in a business combination 
C) for any business combination,both of the combining entities must be identified as the acquirer 
D) the acquiree is the entity that obtains control of the acquirer

Question 18

Discuss the additional guidance given in AASB 3 for identifying the acquirer.

Accepted Answer

Additional guidance provided in AASB 3 s

Question 19

An acquirer might obtain control of an acquiree in a variety of ways including:

Accepted Answer

A) by issuing equity securities 
B) by incurring liabilities 
C) both A and B 
D) none of the above 
A) by issuing equity securities 
B) by incurring liabilities 
C) both A and B 
D) none of the above

Question 20

According to AASB 3,identification of the acquirer can be done by considering which of the following?

Accepted Answer

A) the existence of a large minority voting interest in the combined entity when no other owner or organised group of owners has a significant voting interest 
B) the composition of the governing body of the combined entity 
C) the relative voting rights in the combined entity after the business combination 
D) all of the above 
A) the existence of a large minority voting interest in the combined entity when no other owner or organised group of owners has a significant voting interest 
B) the composition of the governing body of the combined entity 
C) the relative voting rights in the combined entity after the business combination 
D) all of the above

The identifiable assets acquired in a business combination may include which of the following?

Goodwill is initially recorded as:

Explain the three elements of a business.

AASB 3 specifically does not apply to which of the following?

Explain the process of recognising and measuring the identifiable assets and liabilities of the acquiree.

Which of the following statements is incorrect?

AASB 3 establishes principles and requirements for how the acquirer:

Before recognising a gain on a bargain purchase,the acquirer shall review the procedures used to measure the amounts that AASB 3 requires to be recognised at the acquisition date for which of the following:

The final step in the acquisition method is:

The AASB 3 disclosures requirements for each material business combination include:

Discuss the objectives of AASB 3.

Which of the following statements is incorrect?

Identify the major disclosure requirements in AASB 3 for each material business combination occurring during the reporting period.

A non- controlling interest arises when:

Explain the accounting requirements for acquisition- related costs.

Which of the following statements is correct?

Discuss the additional guidance given in AASB 3 for identifying the acquirer.

An acquirer might obtain control of an acquiree in a variety of ways including:

According to AASB 3,identification of the acquirer can be done by considering which of the following?

The Nature and Environment of Companies

Company Formation, Share Capital and Debt Securities

Reserves and Profit Distribution

Published Financial Statements

Accounting for Company Income Tax

Property, Plant and Equipment

Leases

Intangible Assets

Impairment of Assets

Additional Accounting Standards and Disclosures

Principles of Consolidation

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interests

Consolidation: Indirect Non-Controlling Interests

Accounting for Associates

Accounting for Joint Ventures

Accounting for Foreign Currency

Capital Reorganisation

External Administration, Including Liquidation

Key Issues in Australian Corporate Governance

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Exam 9: Business Combinations

The identifiable assets acquired in a business combination may include which of the following?

Goodwill is initially recorded as:

Explain the three elements of a business.

AASB 3 specifically does not apply to which of the following?

Explain the process of recognising and measuring the identifiable assets and liabilities of the acquiree.

Which of the following statements is incorrect?

AASB 3 establishes principles and requirements for how the acquirer:

Before recognising a gain on a bargain purchase,the acquirer shall review the procedures used to measure the amounts that AASB 3 requires to be recognised at the acquisition date for which of the following:

The final step in the acquisition method is:

The AASB 3 disclosures requirements for each material business combination include:

Discuss the objectives of AASB 3.

Which of the following statements is incorrect?

Identify the major disclosure requirements in AASB 3 for each material business combination occurring during the reporting period.

A non- controlling interest arises when:

Explain the accounting requirements for acquisition- related costs.

Which of the following statements is correct?

Discuss the additional guidance given in AASB 3 for identifying the acquirer.

An acquirer might obtain control of an acquiree in a variety of ways including:

According to AASB 3,identification of the acquirer can be done by considering which of the following?

The Nature and Environment of Companies

Company Formation, Share Capital and Debt Securities

Reserves and Profit Distribution

Published Financial Statements

Accounting for Company Income Tax

Property, Plant and Equipment

Leases

Intangible Assets

Impairment of Assets

Additional Accounting Standards and Disclosures

Principles of Consolidation

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interests

Consolidation: Indirect Non-Controlling Interests

Accounting for Associates

Accounting for Joint Ventures

Accounting for Foreign Currency

Capital Reorganisation

External Administration, Including Liquidation

Key Issues in Australian Corporate Governance

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