Under IFRS 3 the method of accounting for a business combination is the:
A) joint venture method
B) purchase method
C) market value method
D) acquisition method

Question

Quizplus · Accepted Answer

Under IFRS 3, the method of accounting for a business combination is the acquisition method. This method requires the acquirer to recognize and measure the identifiable assets, liabilities and contingent liabilities of the acquiree at their fair value at the acquisition date. It also requires the recognition of goodwill or a gain from a bargain purchase, as applicable. The joint venture method, purchase method, and market value method are not recognized accounting methods for business combinations under IFRS 3.

Under IFRS 3 the Method of Accounting for a Business