CFAS PFRS 3: Practical Application and Case Studies
occurs when one company acquires another. - correct answer ✔✔Business Combination
company that obtains control over the other is referred to as - correct answer ✔✔Parent or Acquirer
the other company that is controlled - correct answer ✔✔subsidiary or acquiree
applies to business combinations - correct answer ✔✔PFRS 3
It's objective is to enhance the ___, ___ and ____ of an acquirer's financial reporting by establishing the
recognition and measurement principles and disclosure requirements for a business combination. -
correct answer ✔✔relevance, reliability and comparability
essential elements in the definition of a business combination - correct answer ✔✔1. control
2. business
normally presumed to exist when the acquirer holds more than 50% interest in the acquiree's voting
rights. - correct answer ✔✔Control
an integrated set of activities and assets that is capable of being conducted and managed for the
purpose of providing goods or services. - correct answer ✔✔Business
any economic resource that results to an output - correct answer ✔✔Input
any system, standard, protocol, convention or rule that when applied to an input, creates output -
correct answer ✔✔process
result of input and process that provides goods or services to customers - correct answer ✔✔Output
, business combinations are accounted for using this method. - correct answer ✔✔Acquisition method
the date on which the acquirer obtains control of the acquiree. - correct answer ✔✔acquisition
date/closing date
a negative amount resulting from the formula - correct answer ✔✔gain on a bargain purchase
the consideration transferred in a business combination is measured at - correct answer ✔✔fair value
costs that the acquirer incurs to effect a business combination - correct answer ✔✔Acquisition-related
costs
acquisition-related costs are recognized as __ when they are inccured. - correct answer ✔✔expenses
the equity in a subsidiary not attributable directly or indirectly to a parent. - correct answer ✔✔Non-
Controlling Interest (NCI) or Minority Interest
measures of non-controlling interest - correct answer ✔✔a. fair value
b. the NCI's proportionate share of the acquiree's identifiable assets
identifiable assets acquired and liabilities assumer are measured at their __ - correct answer
✔✔acquisition-date fair values
prescribes the accounting for assets held for sale including disposal groups, and the presentation and
disclosure of discontinued operations - correct answer ✔✔PFRS 5
an asset that does not meet the definition of a current asset. - correct answer ✔✔Non-current asset
Non-current assets within the scope of PFRS 5 - correct answer ✔✔a. PPE
b. Investment property measured under the cost model
occurs when one company acquires another. - correct answer ✔✔Business Combination
company that obtains control over the other is referred to as - correct answer ✔✔Parent or Acquirer
the other company that is controlled - correct answer ✔✔subsidiary or acquiree
applies to business combinations - correct answer ✔✔PFRS 3
It's objective is to enhance the ___, ___ and ____ of an acquirer's financial reporting by establishing the
recognition and measurement principles and disclosure requirements for a business combination. -
correct answer ✔✔relevance, reliability and comparability
essential elements in the definition of a business combination - correct answer ✔✔1. control
2. business
normally presumed to exist when the acquirer holds more than 50% interest in the acquiree's voting
rights. - correct answer ✔✔Control
an integrated set of activities and assets that is capable of being conducted and managed for the
purpose of providing goods or services. - correct answer ✔✔Business
any economic resource that results to an output - correct answer ✔✔Input
any system, standard, protocol, convention or rule that when applied to an input, creates output -
correct answer ✔✔process
result of input and process that provides goods or services to customers - correct answer ✔✔Output
, business combinations are accounted for using this method. - correct answer ✔✔Acquisition method
the date on which the acquirer obtains control of the acquiree. - correct answer ✔✔acquisition
date/closing date
a negative amount resulting from the formula - correct answer ✔✔gain on a bargain purchase
the consideration transferred in a business combination is measured at - correct answer ✔✔fair value
costs that the acquirer incurs to effect a business combination - correct answer ✔✔Acquisition-related
costs
acquisition-related costs are recognized as __ when they are inccured. - correct answer ✔✔expenses
the equity in a subsidiary not attributable directly or indirectly to a parent. - correct answer ✔✔Non-
Controlling Interest (NCI) or Minority Interest
measures of non-controlling interest - correct answer ✔✔a. fair value
b. the NCI's proportionate share of the acquiree's identifiable assets
identifiable assets acquired and liabilities assumer are measured at their __ - correct answer
✔✔acquisition-date fair values
prescribes the accounting for assets held for sale including disposal groups, and the presentation and
disclosure of discontinued operations - correct answer ✔✔PFRS 5
an asset that does not meet the definition of a current asset. - correct answer ✔✔Non-current asset
Non-current assets within the scope of PFRS 5 - correct answer ✔✔a. PPE
b. Investment property measured under the cost model
