ACCT2201 Week 8 Tutorial

RQ 7. Explain the key steps in the acquisition method.

1. Identify the acquirer
2. Determine the acquisition date
3. Recognise and measure the identifiable assets acquired, the
liabilities assumed and any non-controlling interest in the
acquiree
4. Recognise and measure goodwill or a gain from a bargain
purchase

RQ 10. How is a gain on bargain purchase accounted for?

Gain on bargain purchase = Acquirers interest in the net fair value
of the acquirees identifiable assets and liabilities consideration
transferred.
Paragraph 36 of AASB 3 requires that before a gain is recognised,
the acquirer must reassess whether:

It has correctly identified all the assets acquired and liabilities

assumed
It has correctly measured at fair value all the assets acquired
and liabilities assumed
It has correctly measured the consideration transferred