Business Combination & Consolidation

Question 1

Steps to apply acquisition method

Answer 1

1-Identify the acquirer
2-Determine the acquisition date
3-Recognize and measure fair value of the identifiable assets and liabilities
4-Recognize and measure goodwill, or a gain from a bargain purchase

Question 2

Goodwill

Answer 2

Goodwill is defined as “an asset representing thee future economic benefits that arises from other assets acquired in a business combination that are not individually identified and separately recognized”