IFRS 3

Question 1

business combination

Answer 1

A transaction or other event in which an acquirer obtains control of one or more businesses.

Question 2

business

Answer 2

An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income

Question 3

acquirer

Answer 3

The entity that obtains control of the acquiree

Question 4

acquiree

Answer 4

The business or businesses that the acquirer obtains control of in a business combination

Question 5

BC elements

Answer 5

Inputs
Process
Output

Question 6

Acquisition method

Answer 6

Identification of the ‘acquirer’
Determination of the ‘acquisition date’
Recognition and measurement of the identifiable assets acquired, the liabilities assumed, and any non-controlling interest (NCI, formerly called minority interest) in the acquiree
Recognition and measurement of goodwill or a gain from a bargain purchase

Question 7

Acquired assets and liabilities

Answer 7

Recognised separately from goodwill
Measured at acquisition-date fair value.

Question 8

Goodwill

Answer 8

Consideration transferred
+ Amount of non-controlling interests
+ Fair value of previous equity interests
- Net assets recognised

Question 9

Choice in the measurement of NCI

Answer 9

fair value (sometimes called the full goodwill method), or
the NCI’s proportionate share of net assets of the acquiree

Question 10

Measurement period

Answer 10

cannot exceed one year from the acquisition date, and no adjustments are permitted after one year except to correct an error

Question 11

Contingent consideration

Answer 11

measured at fair value at the time of the business combination and is taken into account in the determination of goodwill