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PFRS 3 Business Combinations Explained

The document discusses accounting for business combinations under PFRS 3, specifying that the acquisition method must be used. It identifies the company gaining control as the acquirer. Additionally, it states that certain transaction costs, such as legal and accounting fees, do not increase the amount of goodwill from a business combination.

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8 views1 page

PFRS 3 Business Combinations Explained

The document discusses accounting for business combinations under PFRS 3, specifying that the acquisition method must be used. It identifies the company gaining control as the acquirer. Additionally, it states that certain transaction costs, such as legal and accounting fees, do not increase the amount of goodwill from a business combination.

Uploaded by

jelou ubag
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

CFAS Chapter 21 Problem 1

1. Which of the following methods must be applied in accounting for business combinations
under PFRS 3? Acquisition method
2. The company that obtains control over another company in a business combination
transaction is referred to as the acquirer
3. According to PFRS 3, which of the following transaction costs would increase the amount of
goodwill from a business combination? None of the above (options presented: legal fees,
accounting fees and similar costs; issuance costs of equity securities; issuance costs of debt
instruments)

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