IFRS for SMEs) IFRS for SMEs Business Combinations and Goodwill 2

Question 1

In a business combination under IFRS for SMEs, which of the following would qualify for separate recognition as an intangible asset apart from goodwill?

Accepted Answer

A customer list that is separable and can be sold independently

Answer

Assembled workforce synergies

Answer

Expected future cost savings from integration

Answer

Favorable employee morale

Question 2

Under IFRS for SMEs, contingent consideration in a business combination is included in the cost of the combination only if:

Accepted Answer

Payment is probable and the amount can be measured reliably

Answer

It is always included at fair value at the acquisition date

Answer

It is approved by both parties' boards of directors

Answer

The contingency is resolved within 12 months

Question 3

Under IFRS for SMEs, non-controlling interest (NCI) in a business combination is measured at:

Accepted Answer

NCI's proportionate share of the acquiree's identifiable net assets

Answer

Fair value at the acquisition date

Answer

Either fair value or proportionate share at the acquirer's choice

Answer

Book value of net assets attributable to NCI

Question 4

Under IFRS for SMEs, a contingent liability of the acquiree is recognized at the acquisition date if:

Accepted Answer

It represents a present obligation and its fair value can be measured reliably

Answer

Its fair value can be measured reliably, regardless of probability

Answer

It is probable an outflow of economic benefits will occur

Answer

It was disclosed in the acquiree's pre-acquisition financial statements

Question 5

How is goodwill presented in the statement of financial position under IFRS for SMEs?

Accepted Answer

As an intangible asset within non-current assets

Answer

As a current asset

Answer

As a separate line item distinct from all other intangibles

Answer

As a reduction of equity

Question 6

If a contingent amount included in the cost of a business combination at acquisition is subsequently adjusted under IFRS for SMEs, the adjustment is treated by:

Accepted Answer

Adjusting goodwill and the related asset or liability

Answer

Recognizing the adjustment in profit or loss in the current period

Answer

Restating prior period financial statements retrospectively

Answer

Offsetting the adjustment directly against retained earnings

Question 7

Under IFRS for SMEs, after initial recognition, goodwill is subsequently carried at:

Accepted Answer

Cost less accumulated amortization and accumulated impairment losses

Answer

Fair value less accumulated amortization

Answer

Replacement cost less accumulated depreciation

Answer

Revalued amount less subsequent amortization