Under IFRS 3.25, an acquirer is required to recognize and measure:
A)The effect of any temporary differences of an acquiree that exist at the acquisition date or that arise as a result of the acquisitions.
B)The effect of any temporary differences and carryforwards of an acquiree that exist at the acquisition date or that arise as a result of the acquisitions.
C)The effect of any carryforwards of an acquiree that arise as a result of the acquisitions.
D)Any temporary differences and carryforwards of an acquiree that exist at the acquisition date.

Question

Quizplus · Accepted Answer

Under IFRS 3.25, an acquirer is required to recognize and measure the effect of any temporary differences and carryforwards of an acquiree that exist at the acquisition date or that arise as a result of the acquisition. Temporary differences are differences between the carrying amount of an asset or liability in the financial statements and its tax base. Carryforwards are unused tax losses or unused tax credits that an entity can use to reduce its future tax liabilities. Therefore, choice B is the best answer that correctly reflects the requirements of IFRS 3.25.