Where the acquirer purchases assets and assumes liabilities of another entity it does not need to consider measurement of:
A) goodwill.
B) consideration transferred.
C) fair values of identifiable net assets.
D) carrying amounts of identifiable net assets.

Question

Quizplus · Accepted Answer

When an acquirer purchases assets and assumes liabilities of another entity, it does not need to consider the carrying amounts of identifiable net assets. Instead, it must determine the fair values of the identifiable net assets, which may result in the recognition of goodwill or a gain on bargain purchase. The consideration transferred is also relevant in determining the total cost of the acquisition.

Where the Acquirer Purchases Assets and Assumes Liabilities of Another