The individual financial statements of a parent company
The individual financial statements of a holding company
The group financial statements of a parent company
The combined group and individual financial statements of a holding company
Goodwill arising in a business combination is
The difference between the consideration paid for an acquired company and the book value of its net assets
The difference between the cost of the acquisition and the fair value of the net assets of the acquired company
The difference between the fair value of a group’s assets and their underlying book values
The difference between the tax value of the net assets of the acquired company and the consideration paid
According to IFRS 3, goodwill arising in a business combination is
Immediately written off against group reserves
Capitalised and tested for impairment at least annually
Capitalised and amortised over its useful life
Written off as an expense against income in the year of acquisition
Non-controlling interests refer to
The net profit and equity attributable to outside shareholders within the parent company;
The net profit and equity attributable to outside shareholders within a group’s subsidiaries
The proportion of shares of the parent company held by shareholders aged under 18 years
The amount of net profit and equity within a group attributable to the shareholders of subsidiaries
The amount of net profit and equity within a group attributable to associated companies
Which of the following statements is most accurate in deciding on fair value adjustments of acquired assets and liabilities
Receivables are valued at the present value of the amounts to be received
Finished goods are valued at their cost less costs of disposal
Land and buildings are valued at their fair value less accumulated depreciation
Consumables are valued at their current market value less accumulated impairment losses
Which of the following items would be included in the cost of a business combination?
Allocated overhead expenses;
Consulting costs for due diligence performed by an accounting firm
Administrative costs of a mergers and acquisitions department
The market value of shares issued by the acquirer in exchange for control of the acquiree
Fees paid for legal advice
Which of the following events does not qualify as a business combination according to IFRS3?
Company Alfa buys 100% of the equity of Company Beta
Company Alfa buys the net assets of Company Beta
Company Alfa buys 31% of the outstanding shares (and equivalent voting rights) of Company B
Company Alfa buys one of the two stand-alone plants that Company Beta uses to manufacture its products
The equity method is used to account for
A subsidiary
An associated company
A company under dominant influence
An available-for-sale investment
Jointly controlled assets
The equity method is used when a company purchases
More than 30% of the debt instruments of another company
51% of the debt instruments of another company
10% of the outstanding shares of another company
30% of the outstanding shares of another company
Investments in equity instruments of other companies can be labelled as any of the following except
Investments in associated companies
Investments in joint ventures
Investments in consolidated companies
Available-for-sale investments
Held-to-maturity investments
IFRS recommends to account for jointly controlled entities using the
Full consolidation method
Proportionate consolidation method
Equity method
Fair value method
Cost method
Investments in other companies which grant the investor significant (but no dominant) influence over the investee will be accounted for using the
Full consolidation method
Proportionate consolidation method
Equity method
Fair value method
Cost method
According to IFRS, when a company purchases 12% of the equity instruments of another company, this investment will ordinarily be accounted for using the
Full consolidation method
Proportionate consolidation method
Equity method
Fair value method
Cost method
Company Alfa has been notified by its legal council of a probable (incoming) payment of compensation arising from a court case they have brought against a supplier. How should Company Alfa treat this information?