If the Cost of a Business Combination Is Greater Than

question 13

Multiple Choice

If the cost of a business combination is greater than the acquired interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree:

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

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Definitions:

Secondary Research

The process of gathering data or information that has already been collected or published by others, often used to gain a broad understanding of a topic without primary data collection.

Report Process

The sequence of steps involved in the gathering, analyzing, and presenting information typically for business or research purposes.

Constancy

This term denotes the quality of remaining unchanged or stable in various conditions or over time.

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, influenced by culture, attitudes, emotions, and genetics.