Exam 12: Business Combinations

Appendix B of AASB 3 Business Combinations requires disclosure of which of the following? I.Details of contingent consideration. II.The date of exchange. III.Carrying amounts of assets and liabilities in business combinations where shares are acquired. IV.A qualitative description of the factors that make up goodwill.

The information contained within Appendix B of AASB 3 Business Combinations in relation to disclosure:

Which of the following is an example of a contract-based intangible asset?

When the acquirer buys only shares in the acquiree,there are no entries in the records of the acquiree.

In a business combination achieved in stages,the acquirer shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain or loss,if any,in profit or loss or other comprehensive income.

Cockroaches Limited acquired the identifiable assets,liabilities and contingent liabilities of Inglis Limited for $268 000.The items acquired,stated at fair value,are: plant $144 000; inventory $80 000; accounts receivable $36 000; patents $20 000; and accounts payable $32 000.The difference on acquisition is:

Core goodwill consists of:

According to the Conceptual Framework,recognition of an asset occurs if it is probable that future economic benefits will flow to the entity and:

AASB 3 Business Combinations requires an acquiree to go into liquidation in the event of a business combination.

According to AASB 3 Business Combinations,the appropriate accounting treatment for the costs of issuing shares by the acquirer as part of a business combination is to record them as a debit to:

Goodwill arising in a business combination is classified as a/an:

Which of the following is an example of asset recognised by the acquirer as part of a business combination but that is not recognised by the acquiree?

Which of the following statements is incorrect?

Fair value is determined in the first instance by reference to observable prices in an active market for identical assets or liabilities.

The date on which the acquirer obtains control of the acquiree is referred to as the:

Where equity instruments are issued as part of the consideration in a business combination,any costs associated with issuing such equity instruments are included as part of the cost of the business combination.

Under AASB 3 Business Combinations,a gain on bargain purchase arises when the acquirer's interest in the net fair value of the acquiree's identifiable assets and liabilities is:

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date is defined in AASB 3 Business Combinations as the:

Acquisition-related costs associated with a business combination,such as professional fees paid to accountants,legal advisers and other consultants,are considered part of the cost of acquisition.

Suncorp Limited acquired a 15% interest in Milton Pty Ltd on 1 January 2014.On 15 September 2014 it acquired an additional 25% interest,and on 15 March 2015 a further 15%.Under AASB 3,a business combination occurs on: