GIJ Ltd acquired some assets from FUG Ltd for less than their fair value.The assets do not comprise a business.After allocating the discount to the non-monetary assets there was some discount remaining because the non-monetary assets had been written down to zero.How should GIJ Ltd account for this remaining amount?
A)Treat it as revenue of the current period
B)Treat is as revenue over the life of the non-monetary assets acquired
C)Transfer it to an asset revaluation reserve
D)Record a contra asset account and debit future depreciation charges against this account.

Question

Quizplus · Accepted Answer

When a company acquires assets for less than their fair value and the assets do not comprise a business, any remaining discount after allocating to non-monetary assets should be recognized as revenue of the current period. This approach aligns with the principle that gains from the purchase of assets at below fair value are recognized immediately when they do not constitute a business combination.

GIJ Ltd Acquired Some Assets from FUG Ltd for Less