Under IFRS 3, which concept must be used to report the assets and liabilities of an acquired company on the parent company financial statements?
A)Parent company concept
B)Equity concept
C)Entity concept
D)Historical cost concept

Question

Quizplus · Accepted Answer

The entity concept requires that the assets and liabilities of the acquired company be reported on the parent company financial statements at their fair values at the acquisition date, rather than at historical cost or the parent company's equity. This approach provides users of the financial statements with a more accurate view of the assets and liabilities acquired, as well as the impact of the acquisition on the parent company's financial position.

Under IFRS 3, Which Concept Must Be Used to Report