Page 24 - Finac2 Test 1 Slides - 2. Business Combinations

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Goodwill or gain on bargain purchase

• Goodwill or gain on bargain purchase is measured as

the difference between (A) and (B):

• (A) the sum of the following:

• the fair value of the consideration transferred

• the recognised amount of any non-controlling interests in the

acquiree

• if the business combination is achieved in stages, the fair value of
any previously held equity interest in the acquiree

• (B) the recognised amount (usually fair value) of the

identifiable assets acquired and liabilities assumed

• If the difference is a positive amount (debit), goodwill is

recognised.

• If the difference is a negative amount (credit), then a gain

from a bargain purchase is recognised.

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