According to AASB 3/IFRS 3 Business Combinations, the Key Principle

question 26

Multiple Choice

According to AASB 3/IFRS 3 Business Combinations, the key principle relating to the disclosure of information about business combinations is to disclose information that:

• A) enables financial statement users to evaluate the nature and financial effect of business combinations that occurred during the reporting period.
• B) enables the preparation of the consolidated financial statements in the most cost-effective manner.
• C) does not give an advantage to the competitors of a consolidated group.
• D) provides financial statement users with information about the parent entity only.

---

Definitions:

Contract Cost

is the total expense that a company recognizes on its books for a specific contract over its duration, encompassing labor, materials, and overhead.

Deductible IRA Contribution

A contribution to an Individual Retirement Account (IRA) for which the taxpayer can claim a tax deduction, subject to certain conditions and limits.

Pension Plan

A retirement plan funded by employers or employees, or both, paying out a fixed sum to retirees, often based on salary and years of service.

AGI

Short for Adjusted Gross Income; it is your gross income after adjustments and deductions, crucial for tax calculations.