The term ‘business combination’ is defined in AASB 3/IFRS 3 Business Combinations to include: I. True mergers or mergers of equals. II. An acquisition of a non-current asset. III. A transaction or other event in which a group of assets is acquired by an entity. IV. A transaction or other event in which an acquirer obtains control of one or more businesses. a. I. and II. only. b. I. and IV only. c II., III. and IV only. d. I., II., III. and IV

The term ‘business combination’ is defined in AASB 3/IFRS 3 Business Combinations to include: I. True mergers or mergers of equals. II. An acquisition of a non-current asset. III. A transaction or other event in which a group of assets is acquired by an entity. IV. A transaction or other event in which an acquirer obtains control of one or more businesses. a. I. and II. only. b. I. and IV only. c II., III. and IV only. d. I., II., III. and IV

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 15CYBK

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PFRS 3 must be applied when accounting for business combinations, but does not apply to:i. Formation of a joint arrangementii. The acquisition of an asset or group of assets that is not a business although general guidance is provided on how such transactions should be accounted foriii. Combination of entities or businesses under common controliv. Acquisitions by an investment entity of a subsidiary that is required to be measured at fair value through profit or loss under PFRS 10 Consolidated Financial Statementsv. Mutual entitiesvi. Not-for-profit organizations a. i, ii, iii, iv, and v b. i, ii, iii, and iv c. i, ii, iii, iv, v, and iv d. i, ii, iii, iv, and vi
In a business combination, the acquiree is the business that: Select one: a. Finances the business combination. b. Pays the acquisition consideration. c. The acquirer obtains control of in a business combination. d. Obtains control of the acquiree.
PFRS 3 must be applied when accounting for business combinations, but does not apply to:i. Formation of a joint arrangementii. The acquisition of an asset or group of assets that is not a business although general guidance is provided on how such transactions should be accounted foriii. Combination of entities or businesses under common controliv. Acquisitions by an investment entity of a subsidiary that is required to be measured at fair value through profit or loss under PFRS 10 Consolidated Financial Statementsv. Mutual entitiesvi. Not-for-profit organizations i, ii, iii, iv, v, and iv i, ii, iii, and iv i, ii, iii, iv, and vi i, ii, iii, iv, and v
Acquisition accounting requires an acquirer and an acquirer to be identified for every business combination. Where a new entity (H) is created and two pre-existing entities, S and A, which of these entities will be designated as the acquirer? a. H b. S or A c. S d. A
Acquisition accounting requires an acquirer and an acquirer to be identified for every business combination. Where a new entity (H) is created and two pre-existing entities, S and A, which of these entities will be designated as the acquirer? H S A S or A
Statement I: A consolidation occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes.Statement II: In a consolidation, all of the combining entities transfers their net assets to form a new entity or sometimes referred as roll-up or put-together transaction. a. True, True b. False, False c. False, True d. True, False
1 Which of the following is a characteristic of a business combination that should be accounted for as an acquisition? Group of answer choices a. The combination must involve the exchange of equity securities only. b. The transaction may be considered to be uniting of the ownership interest of the companies involved. c. The transaction establishes an acquisition fair value basis for the company being acquired d. Two companies may be about the same size and it is difficult to determine the acquired company and acquiring company.
PFRS 3 requires that all business combination be accounted for using a. the pooling interest method b. the acquisition method c. either the pooling of interest or acquisition methods d. neither the pooling of interest nor acquisition methods
Statement I: For each business combination, an acquiree is always identified.Statement II: The acquisition date is the date where the acquiree obtains control over the acquirer. a. True, False b. True, True c. False, True d. False, False
Which consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.
Statement 1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in profit or loss. Statement 2: If a new entity is formed to issue equity interests to effect a business combination one of the combining entitites that existed before the combination shall be identified as the acquirer. Which statement/s is TRUE?
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

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I.	True mergers or mergers of equals.
II.	An acquisition of a non-current asset.
III.	A transaction or other event in which a group of assets is acquired by an entity.
IV.	A transaction or other event in which an acquirer obtains control of one or more businesses.