| consideration transferred is measured at _______ at acquisition date | fair value |
| cash or other monetary assets fair value = | the amount of cash or cash equivalent dispersed |
| when the settlement is deferred at the time of acquisition date, deferred payment fair value = | the amount the entity would have to borrow to settle the debt immediately (present value of the obligation) |
| when the settlement is deferred at the time of acquisition date, Discount rate used = | entity's incremental borrowing rate |
| Assets such as property, plant, and equipment, investments, licenses and patents | non-monetary assets |
| non-monetary fair value = | if active second-hand market exists, obtained by reference to those |
| equity instruments fair value = | for listed entities, reference is made to the quoted prices of the shares at acquisition date |
| liabilities undertaken fair value = | present values of expected future cash outflows |
| An obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if the specified future events occur or conditions are met | contingent consideration |
| T/F: In an contingent consideration, may also give the acquirer the right to the return of previously transferred consideration if specified conditions are met | true |
| An add-on to the base acquisition price that is based on events occurring or conditions being met some time after the purchase takes place | contingent consideration |
| Exchanged for awards held by the acquiree's employees | share-based payment awards |
| share-based payment awards measurement = | market based measure |
| T/F: The acquirer is not obliged to replace the acquiree's awards if the acquiree or the employees have the ability to enforce replacement, either all or a portion of the market-based measure of the acquirer's replacement awards is included in measuring consideration transferred in the business combination | False, the acquirer is obliged to replace the acquiree's awards if the acquiree or the employees have the ability to enforce replacement, either all or a portion of the market-based measure of the acquirer's replacement awards is included in measuring consideration transferred in the business combination |
| T/F: Acquisition related costs are excluded from the measurement of the consideration paid | True |
| They are as follows:
□ Costs directly attributable to the combination
□ Indirect, ongoing costs, general costs including the cost to maintain an internal acquisition department | Acquisition-related costs |
| T/F: Acquisition-related costs, If associated with a business combination are accounted for as expenses in the periods in which they are incurred and the services are received | true |
| T/F: Costs of issuing equity instruments/share issuance costs are not excluded from the consideration and accounted for separately | false, they are excluded from the consideration and accounted for separately |
| These costs are accounted for in accordance with PAS 32 | Costs of issuing equity instruments/share issuance costs |
| These outlays should be treated as a reduction in the share capital | Costs of issuing equity instruments/share issuance costs |
| T/F: Costs of issuing equity instruments/share issuance costs reduce the proceeds from equity issue - reducing the additional paid-in capital, net of any related income tax benefit | true |
| Share premium/Additional paid-in capital from the related issuance not enough to absorb cost of issuing equity instruments/share issuance cost | ▪ excess should be debited to 'Share Issuance Costs'
▪ treated as a contra shareholders' equity account as a deduction in the ff order of priority:
1. Share premium from previous share issuance
2. Retained Earnings with appropriate disclosure |
| T/F: Additional acquisition-related restructuring costs = unless represented by acquisition-date liabilities, are not expensed as incurred because they affect acquisition cost | False, Additional acquisition-related restructuring costs = unless represented by acquisition-date liabilities, are expensed as incurred and do not affect acquisition cost |
| T/F: Listing fee for initial public offering of shares = outright expense | true |
| Deemed as yield adjustments to the cost of borrowing | cost of issuing debt instruments |
| T/F: Cost of issuing debt instruments are excluded in the measurement of the liability as bond issue cost and should not be amortized over the life of the debt | False, they are included in the measurement of the liability as bond issue cost and amortized over the life of the debt |
| Legal fees, finders and brokerage fees, advisory, accounting valuation (valuers) and other professional or consulting fees to affect the combination | Direct attributable cost |
| General and administrative costs | Indirect acquisition costs |
| Transaction costs such as stamp duties on new shares, professional adviser's fees, underwriting costs and brokerage fees might be incurred | cost of issuing securities |
| Professional adviser's fees, underwriting costs and brokerage fees | Cost of arranging and issuing debt securities or financial liabilities |
