Exam 12: Business Combinations

When an acquiree liquidates,the accounts of the acquiree are transferred to which two accounts?

For a group of assets to constitute a business,they must be capable of providing a return.

In respect to a business combination,a gain on bargain purchase arises where the acquirer's interest in the net fair value of the identifiable assets and liabilities acquired is greater than the consideration transferred by the acquirer to the acquiree.

The acquirer in a business combination is the party that loses control of a business.

Bellvista Limited acquired the net assets and contingent liabilities of Aroona Limited for a purchase consideration of $600 000.Aroona Limited's net assets and contingent liabilities at fair value were: total assets $840 000; total liabilities $300 000; and contingent liabilities $100 000.The amount of goodwill to be recognised by Bellvista Limited when recording the business combination is:

According to Johnson and Petrone (1998),which of the following is not a component of goodwill?

At the date of acquisition,goodwill is measured as the excess of the consideration transferred over the net fair value of the identifiable assets acquired and liabilities assumed.

A gain on bargain purchase is recognised in profit or loss in the year it arises.

In a business combination,the acquirer is the entity that: