Cima F2 Exam Question No 46

Question No 46:

What acquisition accounting?

•  Add the parent and subsidiary's assets, liabilities, income and expenses in full

• Recognise goodwill in accordance with IFRS 3 (revised) Business Combinations

• The share capital of the group is only the share capital of the arent

• Adjustments are made to record the subsidiary's net assets at fair value at the date of acquisition

• Intra-group balances and transactions must be eliminated in full

• Profits/losses on intra-group transactions are eliminated in full (the PUP adjustment)

• Uniform accounting policies must be used