CAF-6 · Chapter 9 · Question 5 of 15
If the fair value of net identifiable assets acquired is HIGHER than the sum of consideration and NCI, the difference is recognized as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Gain on a Bargain Purchase (Profit or Loss).
Explanation
A 'bargain purchase' occurs when the acquisition cost is less than the fair value of net assets acquired. It is recognized as a gain in profit or loss.
More Consolidation (IFRS 10, IFRS 3) MCQs
- Q7When eliminating intra-group dividends, which of the following is correct?
- Q8In the Consolidated Statement of Financial Position, 'Share Capital' should reflect:
- Q9IFRS 3 allows NCI at the date of acquisition to be measured at either Fair Value (Full Goodwill) or:
- Q10At the reporting date, NCI in the Statement of Financial Position is calculated as:
- Q11How are 'Intra-group balances' (like a loan from parent to subsidiary) treated on consolidation?