Under AASB 3/IFRS 3, the Method of Accounting for a Business

question 4

Multiple Choice

Under AASB 3/IFRS 3, the method of accounting for a business combination is the:

• A) purchase method.
• B) acquisition method.
• C) joint venture method.
• D) market value method.

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Definitions:

Minority Shareholders

Investors who own less than 50% of a company's shares, and typically have limited influence over company decisions.

State Corporate Statutes

Laws enacted by states governing the formation, operation, and dissolution of corporations within that state.

Fiduciary Duty

An obligation to act in the best interest of another party, such as the relationship between a trustee and the beneficiaries of the trust.

Breach of Fiduciary Duty

Occurs when an individual in a trusted position fails to act in the best interests of another party whom he or she has a duty to.