If the Consideration Transferred Is Greater Than the Acquired Interest

question 17

Multiple Choice

If the consideration transferred is greater than the acquired interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree:

• A) a gain on bargain purchase results.
• B) goodwill has been purchased and must be recognised on consolidation.
• C) the difference is treated as a special equity reserve in the acquirer's accounting records.
• D) the difference is immediately charged to profit or loss in the period in which the business combination occurred.

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Definitions:

Interest Being Charged

The cost of borrowing money, typically expressed as a percentage of the principal loan amount, charged over time.

Collections Process

The series of actions taken by organizations to pursue and recover payments owed by customers or clients.

Certified Collection Agency

A debt collection agency that has received certification, indicating it adheres to ethical standards and legal regulations in debt collection.

Office Policy

Guidelines and rules established within an office or organization to dictate workflows and behavioral expectations.