According to AASB 3 Business Combinations,the Appropriate Accounting Treatment for the Costs

question 10

Multiple Choice

According to AASB 3 Business Combinations,the appropriate accounting treatment for the costs of issuing shares by the acquirer as part of a business combination is to record them as a debit to:

• A)share capital.
• B)share issue reserve.
• C)retained earnings.
• D)acquisition expenses.

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Definitions:

Indemnify

To compensate for harm or loss, or to provide a security against any financial burden that might arise.

Fire

A rapid oxidation process generating heat, light, and various reaction products, often used for heating, power generation, or as a hazard.

Co-Insurance

An insurance policy feature where the insured party and the insurer share the covered losses in a defined proportion.

Insured

The individual or entity covered by an insurance policy, which provides protection against loss or damage.