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ADVANCED ACCOUNTING 2
Assignment: Choose the best answer and be prepared TO JUSTIFY your answer next meeting.
1. Which of the following items that are recorded at the acquirees books at acquisition date cannot be
recorded at the acquirers book?
.
2.
3.
4.
5.
6.
7.
8.
a. Contingent Liability
b. Goodwill
c. Premium on Bonds Payable
d. Marketable Securities
Which of the following statements is false?
I. In a business combination in contract alone, the acquirer shall remeasure its previously held equity
interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or loss, if any, in
profit or loss
II. In a business combination in contract alone, the acquirer shall attribute to the owners of the acquiree the
amount of the acquirees net assets recognized in accordance with this IFRS.
a. I only.
b. II only
c. Both I and II.
d. Neither I nor II.
Which of the following may not be given as a consideration by an acquirer?
a. Bond
b. Preferred Stock
c. Convertible Preferred Stock
d. None of the above
In business combination, the measurement period allowed is:
a. One year from the liquidation date.
b. One year from the end of the reporting period.
c. One year from contract date.
d. One year from acquisition date.
An entity purchased 100% of the net assets of another entity. On the acquirers books, which of the following
accounts is NOT usually debited?
a. Common Stock
b. Share Premium
c. Retained Earnings
d. Goodwill
After initial recognition, the acquirer shall measure goodwill acquired in a business combination at:
a. Fair value less any accumulated impairment losses
b. Cost less any accumulated amortization and accumulated impairment losses
c. Cost less any accumulated impairment losses
d. Fair value less any accumulated amortization and accumulated impairment losses
Which of the following best describes the recoverable amount of an asset?
a. Higher of value in use and fair value less cost to sell.
b. Higher of value in use and fair value.
c. Higher of carrying amount and fair value.
d. Higher of carrying amount and fair value less cost to sell.
Which of the following statements is true?
I If the contingent consideration is classified as an equity instrument, the original amount is remeasured.
II. The requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets do not apply to the
recognition of contingent liabilities arising in a business combination.
a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.