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? a. H b. S or A c. S d. A

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

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a. H

b. S or A

c. S

d. A

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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
Explain the key steps in the acquisition method in accounting for business combination. Why Fair value is the rule?
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
(TCO B) How are accounting for direct costs, indirect costs, and issuance costs reflected under the acquisition method of accounting for a business combination?
Gain on Bargain Purchase treated as other income in a business combination should be: a. Credited to the income account of both acquirer and acquire b. Credited to the share premium account of the acquirer c. Credited to a deferred credit account d. Credited to the income account of the acquirer
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.
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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.
Choose the correct. When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In a combination created in the middle of a fiscal year.c. In an acquisition when the value of all assets and liabilities cannot be determined.d. When the amount of a bargain purchase exceeds the value of the applicable noncurrent assets (other than certain exceptions) held by the acquired company.
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The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. Cost