Which of the following statements about post-acquisition earnings is incorrect? А. They are the earnings produced subsequent to the acquisition date by members of the group. They form part of earnings of the economic entity. С. B.
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- How should negative goodwill be shown on the consolidated financial statements of the acquirer? Group of answer choices As a liability on the statement of financial position As a loss on the statement of comprehensive income As a separate amount under shareholders' equity on the statement of financial position As a gain on the statement of comprehensive income2. What amount of pre-acquisition earnings is eliminated in the acquisition date worksheet elimination?For fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl ected in shareholders’ equity?A . Th ey are not recognized
- Which of the following is not considered in the determination of Total Assets after business combination? Group of answer choices a.Book value of the acquirer’s total assets. b.Fair value of the acquiree’s total assets. c.Expenses that are actually paid in relation to business combination d.Contingent considerationHow shall an acquirer in a business combination account for the changes in fair value contingent consideration classified as equity instrument if the changes result from events after the acquisition date? a. The changes in fair value of contingent consideration classified as equity shall be recognized as gain or loss in profit or loss because they are not measurement period adjustments. b. Contingent consideration classified as equity shall not be re-measured and its subsequent settlement shall be accounted for within equity. c. The changes in fair value of contingent consideration classified as equity shell be retrospectively restated to beginning retained earnings because they are prior period error. d. The change in fair value of contingent consideration classified as equity shall be retroactively adjusted to goodwill/gain on bargain purchase because they are measurement period adjustments.7.) If the amount paid by an investor (parent) is less than the proportional total of the estimated fair value of investee's (subsidiary's) assets acquired and liabilities assumed, the difference is recorded as ... a. Negative goodwill in the balance sheet of the investor. b. Gain from a bargain purchase in the income statement of the investor. Gain from a bargain purchase in the income statement of the investee. d. Allocated as a reduction to each of the asset and liability accounts when applying consolidation accounting by the investor. c.
- Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.Which of the following is not considered in the determination of Total Assets after business determination? A. Book Value of the Acquirer's Total Assets B. Fair Value of the Acquiree's Total Assets C. Expenses that are actually paid in relation to business combination D. Contingent ConsiderationFor fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl ected in shareholders’ equity? C . Th ey are a component of accumulated other comprehensive income.
- If a company has elected the fair value option, where are gains and losses resulting from adjusting these accounts to fair value reported? Group of answer choices Unrealized Gains are reported as part of Other Comprehensive Income while Unrealized losses are reported as part of Net Income. Unrealized Gains and Losses are both reported as part of Net Income. Unrealized Gains are reported as part of Net Income, while Unrealized Losses are reported as part of Other Comprehensive Income. Unrealized Gains and Losses are both reported as part of Other Comprehensive Income.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.In the cost method of acquisition income is recognized only when the subsidiary declares dividends Select one: True False