Asked by Mallory Connell on Jun 25, 2024
Verified
The IASB standard (IFRS 3 Business Combinations) issued with respect to the treatment of negative goodwill requires that:
A) it must be recognized in income immediately as an extraordinary item.
B) it must be recognized in income immediately.
C) it can be deferred and amortized over a maximum of 40 years.
D) it must be reflected as an increase in Liabilities and a Reduction in Capital for the Parent Company.
IFRS 3
IFRS 3 is an International Financial Reporting Standard that provides guidance on accounting for business combinations, requiring entities to measure the acquiree's assets and liabilities at their fair values at the acquisition date.
Liabilities
Financial obligations a company owes to external parties, including loans, accounts payable, and other debts.
Business Combinations
Mergers and acquisitions where one company acquires control over another, combining entities into one.
- Learn to identify and compute goodwill in the context of business unions.
Verified Answer
Learning Objectives
- Learn to identify and compute goodwill in the context of business unions.
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