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Hello Sir, Tell me
Where the purchase price of an acquisition is less than the aggregate F.V of the net assets acquired, which one of the accounting treatments of the difference is required by IFRS 3 Business Combination?
A) Deduction from good will in the consolidated SOFP.
B) Immediate recognition as a gain in profit or loss.
I think A is correct but he selected B without telling the reason can u plz elaborate why is that? Thanks for ur precious time. I will really appreciate if u can guide me.The situation that you have outlined is known as a bargain purchase and that results in negative goodwill
The treatment of negative goodwill is to credit it to the statement of profit or loss at the earliest opportunity ie in that statement that is next prepared after the acquisition
OK?
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