According to IFRS 3, a Gain on Bargain Purchase Arises

question 29

Multiple Choice

According to IFRS 3, a gain on bargain purchase arises when the acquirer's interest in the fair value of the acquiree's identifiable assets and liabilities is:

• A) less than the carrying amount of the net assets acquired
• B) less than the consideration transferred
• C) greater than the consideration transferred
• D) more than the book values of the identifiable assets acquired.

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Definitions:

Operating Expenses

Costs associated with the day-to-day functions of a business excluding the cost of goods sold.

Fiscal Year

A fiscal year is a one-year period designated for accounting and financial reporting purposes, differing from the traditional calendar year.

Ledger

The principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type.

Accounting Equation

A fundamental principle of accounting representing the relationship between a company's assets, liabilities, and equity (Assets = Liabilities + Equity).