If the Cost of a Business Combination Is Greater Than

question 6

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 gain on bargain purchase results
• 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:

Destinations

The end points or targets to which something is directed or sent.

Routes

Paths or courses determined for the transportation of goods or people from one location to another.

Distribution Network

The interconnected group of storage facilities and transportation systems that a company uses to get products from the manufacturer to the end consumer.

Raw Material

Basic materials that are processed or transformed into components or products in manufacturing and production processes.