Under AASB 3/IFRS 3 Business Combinations, a gain on bargain purchase arises when the acquirer's interest in the net fair value of the acquiree's identifiable assets and liabilities is:
A) less than the carrying amount of the net assets acquired.
B) less than the consideration transferred.
C) greater than the consideration transferred.
D) more than the book values of the identifiable assets acquired.

Question

Quizplus · Accepted Answer

A gain on bargain purchase under AASB 3/IFRS 3 occurs when the acquirer's interest in the net fair value of the acquiree's identifiable assets and liabilities exceeds the consideration transferred for the acquisition.

Under AASB 3/IFRS 3 Business Combinations, a Gain on Bargain