Valdez Limited acquired a 25% interest in Alaska Pty Ltd on 1 January 2011.On 15 September 2011 it acquired an additional 10% interest,and on 15 March 2012 a further 40%.Under AASB 3 a business combination occurs on:

Question

Quizplus · Accepted Answer

A business combination occurs when an entity obtains control over one or more other entities. Control is achieved when the acquirer has the power to govern the financial and operating policies of the acquiree to obtain benefits from its activities. In this case, Valdez Limited did not obtain control when it acquired a 25% and a 10% interest in Alaska Pty Ltd. However, when it acquired a 40% interest on 15 March 2012, it obtained control over Alaska Pty Ltd and a business combination occurred. Therefore, the correct answer is C - 15 March 2012.

Valdez Limited Acquired a 25% Interest in Alaska Pty Ltd