According to AASB 3/IFRS 3 Business Combinations, the Appropriate Accounting

question 27

Multiple Choice

According to AASB 3/IFRS 3 Business Combinations, the appropriate accounting treatment for the costs of issuing shares by the acquirer as part of a business combination is to record them as a debit to:

• A) share capital.
• B) share issue reserve.
• C) retained earnings.
• D) acquisition expenses.

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Definitions:

Mergers

The combination of two or more companies into a single entity, typically to increase market share or reduce competition.

Standard Oil Case

A 1911 antitrust case in which Standard Oil was found guilty of violating the Sherman Act by illegally monopolizing the petroleum industry. As a remedy, the company was divided into several competing firms.

U.S. Steel Case

The antitrust action brought by the federal government against the U.S. Steel Corporation in which the courts ruled (in 1920) that only unreasonable restraints of trade were illegal and that size and the possession of monopoly power were not by themselves violations of the antitrust laws.

Cellophane Case

The Cellophane Case refers to a landmark antitrust case involving DuPont's monopoly on the cellophane market, highlighting issues of market definition and competition.