Restructuring provisions: a. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS (IAS) 37 b. That do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred c. Generally increases goodwill d. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS (IAS) 37 and do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred

Restructuring provisions: a. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS (IAS) 37 b. That do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred c. Generally increases goodwill d. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS (IAS) 37 and do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 21MCQ

See similar textbooks

Similar questions

Restructuring provisions A. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS 37 B. That do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred C. Generally increases goodwill D. Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS 37 and do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred
In a business combination, an acquirer's interest in the fair value of the net assetsacquired exceeds the consideration transferred in the combination. Under PFRS3 Business Combinations, the acquirer should A. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in othercomprehensive income B. recognize the excess immediately in other comprehensive income C. recognize the excess immediately in profit or loss D. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in profit or loss
Which of the following statements regarding the accounting for business combinations is false? Review Later The acquirer in a business combination will anly recognize the labilities assumed if they meet the definition of liabilities and are part of the business combination transaction. Under the acquisition method, the identifiable assets acquired during a business combination are measured at their acquisition- date fair values. Goodwill is the difference between the consideration transferred by the acquirer to the acquiree and the fair value of identifiable assets acquired. The identifiable assets acquired, liabilities assumed, and noncontrolling interest in the acquiree are recognized separately from the goodwill arising out of a business combination.
Restructuring provisions Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS 37 That do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred Generally increases goodwill Are generally not recognized as part of business combination unless the acquiree has, at the acquisition date, an existing liability for restructuring that has been recognized in accordance with PAS 37 and do not meet the definition of a liability at the acquisition date are recognized as post-combination expenses of the combined entity when the costs are incurred
If the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the acquirer shallI. Reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the combination.II. Recognize immediately in retained earnings any excess remaining after the reassessment. a. II only b. Both I and II c. I only d. Neither I nor II
Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer choices a.When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company. b.In an acquisition when the value of all assets and liabilities cannot be determined. c.When any bargain purchased is created d.In a combination created in the middle of the fiscal year
In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss
S1: Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be accounted for goodwill. S2: With an acquisition, direct and indirect expenses are considered a par of the total cost of the acquired company. Both statements are Only S1 is Only S2 is Both statements are 2. Following the completion of a business combination in the form of a statutory consolidation, what is the balance in the new corporation’s Retained earningsaccount? The acquirer retained earnings accountbalance Thesum of the acquirer and acquiree retained earnings account The acquiree retained earnings accountbalance Zero 3. S1: The acquisition-related costs in a business combination to be expensed immediately include cost of issuing debt securities. S2: In a business combination any “gain on bargain purchase” shall be recognized in other comprehensive income. Only S2 is Both statements are Both statements…
In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under IFRS 3 Business Combinations, the acquirer should a. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss b. recognize the excess immediately in other comprehensive income c. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income d. recognize the excess immediately in profit or loss
Which of the following statements about a business combination is valid? a. The acquirer should recognize the acquiree’s contingent assets if certain conditions are met. b. The acquirer should recognize the acquiree’s contingent liabilities if certain conditions are met. c. The acquirer should recognize the acquiree’s contingent assets regardless of any conditions to be met. d. The acquirer should never recognize the acquiree’s contingent liabilities even if certain conditions are met.
Which of the following is not considered in the determination of Total Assets after business combination? Group of answer choices a.Book value of the acquirer’s total assets. b.Fair value of the acquiree’s total assets. c.Expenses that are actually paid in relation to business combination d.Contingent consideration
Which of the following statements is incorrect? А. For each business combination, one of the combining entities shall be identified as the acquirer. The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date agreed values. An entity shall account for each business combination by applying the acquisition method. C. D. The acquirer is required to recognise, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non- controlling interest in the acquiree. B.