In order for a tangible asset to be recognised by an acquirer under a business combination it must be probable that future economic benefits will flow to the acquirer and:
A) its fair value can be measured reliably
B) it must be a non-current item
C) it must be measured using the present value method
D)it may not be a non-monetary asset.

Question

Quizplus · Accepted Answer

According to the IFRS 3 standard on Business Combinations, a tangible asset can be recognised by an acquirer if it is probable that future economic benefits will flow to the entity and its fair value can be measured reliably. Therefore, option A is the correct choice.

B) is incorrect because being a non-current item is not a requirement for recognition.
C) is incorrect because the present value method is not mandatory for measuring the fair value of tangible assets.
D) is incorrect because non-monetary assets can be recognised if certain conditions are met.

In Order for a Tangible Asset to Be Recognised by an Acquirer