15) How soon does goodwill acquired in a business combination need to be tested after an acquisition? Select one: a. O b. The year of acquisition Oc. Two years after acquisition Od. None of the above The year after acquisition
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- 5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensedDuring the measurement period, which of the following may affect the amount ofgoodwill from business combination? A.New information regarding estimates in the contingent consideration that are not existing atthe date of acquisitionB.Nothing can affect the amount of goodwill.C.New information regarding estimates in the contingent consideration that are existing at thedate of acquisition.D.New information regarding estimates in the contingent considerationChoose the correct. When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In a combination created in the middle of a fiscal year.c. In an acquisition when the value of all assets and liabilities cannot be determined.d. When the amount of a bargain purchase exceeds the value of the applicable noncurrent assets (other than certain exceptions) held by the acquired company.
- When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In a combination created in the middle of a fiscal year.c. In an acquisition when the value of all assets and liabilities cannot be determined.d. When the amount of a bargain purchase exceeds the value of the applicable noncurrent assets (other than certain exceptions) held by the acquired company.A gain on a bargain purchase is A. Recognized in profit or loss in the year of acquisitionB. Amortized in profit or loss over the lower of its legal life and estimated useful lifeC. Recognized in profit or loss in the year of acquisition but only after reassessment of the assets acquired and liabilities assumed in the business combinationD. None of the aboveUnder PFRS 3, when is a gain recognized in consolidating financial information? Group of answer choices a.When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company. b.In an acquisition when the value of all assets and liabilities cannot be determined. c.When any bargain purchased is created d.In a combination created in the middle of the fiscal year
- 5. how much is the goodwill/(gain from bargain purchase) at the date of acquisition? 6. how much is the total assets at the date of acquisition?Indicate whether the following items are capitalized or expensed in the current year. a. Purchase cost of a patent from a competitor. b. Research and development costs. c. Organizational costs. d. Costs incurred internally to create goodwill.Under PFRS 3, when is a gain recognized in consolidating financial information? a. In a combination created in the middle of the fiscal year b. In an acquisition when the value of all assets and liabilities cannot be determined. c. When any bargain purchased is created d. When the amount of a bargain purchase exceeds the value of the applicable liability held by the acquired company.
- Th e initial measurement of goodwill is most likely aff ected by: B . the acquired company’s book value.1.compute the amount of goodwill acquired 2.Record the acquisition in a financial statements model. Arizona Corporation’s financial condition just prior to the acquisition is shown in the financial statements model 3.Record the acquisition in general journal formatWith respect to goodwill related to acquisition, an impairment is a one-step process considering the entire entity O is a two-step process which analyses each business reporting unit of the entity. will be amortized over the remaining useful life of the asset occurs when asset values are adjusted to fair value in an acquisition. roblems surge on
