CIMA Exam CIMAPRA19-F01-1 Topic 3 Question 12 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 12
Topic #: 3

An entity acquires 100% of the equity shares in another entity.

The consideration paid for the shares is less than the fair value of the net assets acquired.

Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?

ARecognise as a gain in the consolidated statement of profit or loss.

BRecognise as a deferred credit and release to consolidated profit or loss over its useful economic life.

CRecognise as a deduction from goodwill in the consolidated statement of financial position.

DRecognise as a gain in the statement of changes in equity.

Show Suggested Answer

Suggested Answer: A

by Hubert at May 08, 2022, 08:36 PM

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