Under AASB 3 Business Combinations,a gain on bargain purchase arises when the acquirer's interest in the net fair value of the acquiree's identifiable net assets and contingent 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 occurs when the acquirer's interest in the net fair value of the acquiree's identifiable net assets and contingent liabilities is greater than the consideration transferred, indicating that the acquirer has paid less than the fair value of the net assets acquired.

Under AASB 3 Business Combinations,a Gain on Bargain Purchase Arises