AASB 3/IFRS 3 Is Relevant When Accounting for a Business

question 1

Multiple Choice

AASB 3/IFRS 3 is relevant when accounting for a business combination that:

• A) involves mutual entities.
• B) results in the formation of a joint venture.
• C) involves entities or businesses that are not investor owned.
• D) results in an entity acquiring the net assets of another entity.

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Definitions:

Fraudulent Misrepresentation

A false statement made knowingly or recklessly with the intent to deceive and induce another to part with something of value or to surrender a legal right.

Deceit

A tort that arises when a party suffers damage by acting upon a false representation made by a party with the intention of deceiving the other.

Valid Contract

An agreement between two parties that is recognized by law and is enforceable by the legal system.

Undue Influence

A state of affairs whereby a person is so influenced by another that the person’s judgment is not his or her own.