Which of the following statements relating to a gain on bargain purchase is FALSE?
A)Such gains are common.
B)Such gains have no effect on the calculation of the NCI share of equity.
C)Whereas the goodwill of the subsidiary may be determined by calculating the goodwill acquired by the parent entity and then adding the fair value of the NCI to determine the goodwill for the subsidiary, this process is not applicable for a gain on bargain purchase.
D)The gain is made by the parent paying less than the net fair value of the acquirer's share of the identifiable assets, liabilities and contingent liabilities of the subsidiary.

Question

Quizplus · Accepted Answer

Gains on bargain purchases are relatively rare, not common, because it is unusual for a company to be acquired for less than the fair value of its net assets.

Which of the Following Statements Relating to a Gain on Bargain