Exam 26: Share-Based Payment

Fredericks Limited acquired the identifiable assets and liabilities of Nicole Limited for €134 000. The items acquired, stated at fair value, are: • Plant €72 000 • Inventory €40 000 • Trade receivables €18 000 • Patents €10 000 • Trade payables €16 000. The difference on acquisition is:

In order for a tangible asset to be recognised by an acquirer under a business combination it must be probable that future economic benefits will flow to the acquirer and:

When an acquirer accounts for a business combination they have to consider: I.recognition of the identifiable assets acquired II. measurement of the identifiable assets acquired III. recognition of the liabilities assumed IV. measurement of the liabilities assumed

The information contained within Appendix B of IFRS 3 in relation to disclosure:

Bolton Limited acquires the net assets of Pamelia Limited for a cash consideration of $100 000. One half is to be paid on acquisition date and one half is payable in one year's time. The appropriate discount rate is 10% p.a. The present value of the cash outflow in one year's time is:

Where an entity acquires shares rather than the net assets of another entity the acquirer records the shares at:

IFRS 3 is relevant when accounting for a business combination that:

If shares are issued as part of the consideration paid, transactions costs such as brokerage fees may be incurred. According to IFRS 3, the appropriate accounting treatment for such costs in the records of the acquirer is a debit to:

According to IFRS 3, a gain on bargain purchase arises when the acquirer's interest in the fair value of the acquiree's identifiable assets and liabilities is: