How are direct and indirect costs accounted for when applying the acquisition method for a business combination?
A) Option A
B) Option B
C) Option C
D) Option D
E) Option E

Question

How are direct and indirect costs accounted for when applying the acquisition method for a business combination? 
A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) Option E

Quizplus · Accepted Answer

Direct and indirect costs related to a business combination are accounted for in accordance with IFRS 3 (Revised), Business Combinations, which requires those costs to be expensed as incurred, and included in their respective line items in the income statement. Therefore, direct and indirect costs are not capitalized and included as part of the cost of the business combination. Option A is the only option that correctly reflects this requirement.

How Are Direct and Indirect Costs Accounted for When Applying