Under IFRS 3,which concept must be used to report the assets and liabilities of an acquired company on the parent company financial statements?
A)parent company concept
B)equity concept
C)entity concept
D)historical cost concept

Question

Quizplus · Accepted Answer

The entity concept under IFRS 3 requires the assets and liabilities of the acquired company to be reported as a separate entity from the parent company, using fair value accounting. This means that the assets and liabilities are recorded at their fair values at the date of acquisition, rather than at historical cost. The equity concept is relevant for the preparation of consolidated financial statements, but not for the initial reporting of the acquired company's assets and liabilities. The parent company concept and historical cost concept are not relevant for the reporting of the acquired company's assets and liabilities under IFRS 3.

Under IFRS 3,which Concept Must Be Used to Report the Assets