The key principle relating to the disclosure of information about business combinations is to disclose information that:
A) enables users to evaluate the nature and financial effect of business combinations that occurred during the reporting period
B) enables the preparation of the consolidated financial statements in the most cost-effective manner
C) does not give an advantage to the competitors of a business group
D) provides users with information about the parent entity only.

Question

Quizplus · Accepted Answer

The key principle for disclosure of information about business combinations is to enable users to evaluate the nature and financial effect of such combinations during the reporting period. This information should include the method used to determine the fair value of assets acquired and liabilities assumed, the goodwill recognized or loss incurred, and any contingencies related to the business combination. The disclosure should also include information about the acquired entity's assets, liabilities, and operations. The consolidated financial statements of the business combination should reflect this information for the period.

The Key Principle Relating to the Disclosure of Information About