• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Goodwill from a previous acquisition of an unincorporated business

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Goodwill from a previous acquisition of an unincorporated business

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • November 27, 2023 at 7:08 pm #695636
    PurpleLotus
    Participant
    • Topics: 16
    • Replies: 13
    • ☆

    Tom has purchased all the share capital of Jerry during the year.

    Which TWO of the following items would Tom take into account when calculating the fair value of the net assets acquired in accordance with IFRS 3 Business Combinations?

    A – A contingent liability dependent on the outcome of a legal case which has been provided for in Jerry’s financial statements
    B – A provision required to cover costs of re-organising Jerry’s departments to fit in with Tom’s structure
    C – A warranty provision in Jerry’s financial statements to cover costs of commitments made to customers
    D – Goodwill included in Jerry’s statement of financial position, this related to an unincorporated business that Jerry had acquired eight years ago

    Answer A & C.

    Hello Sir, for this question I got the answer right however I am a bit confused about D because I thought that the purchased goodwill wasn’t omitted?
    Would be grateful if you could clarify. Thank you.

    November 29, 2023 at 9:38 pm #695735
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    Yes, your understanding is correct in that we ignore the purchased goodwill in calculating the net assets acquired but I think it is the way the question is phrased that is catching you out. It says “take into account” and technically we are not taking into account the value of the purchased goodwill when calculating the fair value of net assets, we are just ignoring it and so not including it.

    Thanks

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in