ACCA FR · Chapter 12 · Question 12 of 13
Under IFRS 3, what should an acquirer do if the fair value of the net assets acquired is higher than the total of the consideration transferred and the NCI (a 'bargain purchase')?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Review the measurement of all amounts, and recognise any remaining excess as a gain in profit or loss
Explanation
IFRS 3 first requires the acquirer to reassess whether it has correctly identified and measured all assets, liabilities, consideration and NCI. Any excess that remains is a bargain purchase gain, recognised in profit or loss on the acquisition date. Negative goodwill is not carried in the SFP.
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