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CA Final Ind AS 103 Business Combinations — practice questions

Explore 77 free Ind AS 103 Business Combinations questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 103 Business Combinations questions and exercises with answers

Showing questions 1–30 of 77.

Ind AS 103 requires every business combination in its scope to follow which accounting approach?Read the answer and worked solution →The acquisition date under Ind AS 103 is tied to the day the acquirer takes which step?Read the answer and worked solution →Which item is among the four things the acquisition method requires?Read the answer and worked solution →Firm X buys a bundle of assets that does not form a business. Goodwill on this deal is?Read the answer and worked solution →The price paid for a non-business asset group is split across the assets using what?Read the answer and worked solution →Which Ind AS supplies the main test for who the acquirer is?Read the answer and worked solution →On the size indicator, the likely acquirer is the combining entity that is which?Read the answer and worked solution →Identifiable assets and liabilities taken over are normally recorded at which amount?Read the answer and worked solution →What measurement choice exists for a present-ownership NCI at the acquisition date?Read the answer and worked solution →A present-obligation suit is unlikely to be paid. Is a liability booked?Read the answer and worked solution →Deferred tax arising on assets and liabilities taken over follows which standard?Read the answer and worked solution →Liabilities for the acquiree's staff benefit plans are measured under which standard?Read the answer and worked solution →When is an indemnification asset booked?Read the answer and worked solution →A reacquired right is valued using which term, ignoring expected renewals?Read the answer and worked solution →Replacement share awards are measured using which method?Read the answer and worked solution →An acquired disposal group is classified as held for sale on the acquisition date. It is measured at?Read the answer and worked solution →A plot held for sale is acquired with fair value Rs 50 lakh and selling costs Rs 4 lakh. Recognised amount?Read the answer and worked solution →Buying 90% of S costs Rs 720 lakh; S's net assets are Rs 700 lakh; NCI at share. Goodwill?Read the answer and worked solution →Take the same deal (Rs 720 lakh for 90%, net assets Rs 700 lakh) but NCI is valued at Rs 85 lakh fair value. Goodwill?Read the answer and worked solution →Ind AS 103 first shows a bargain gain in?Read the answer and worked solution →P pays Rs 600 lakh for net assets worth Rs 750 lakh (no NCI). Capital reserve?Read the answer and worked solution →What review precedes booking any bargain purchase gain?Read the answer and worked solution →The purchase consideration is the sum of which acquisition-date amounts?Read the answer and worked solution →P hands sellers a vehicle with book value Rs 60 lakh and fair value Rs 90 lakh. Profit or loss effect?Read the answer and worked solution →P gives a vehicle to the acquired company itself, so P still controls it afterwards. It is measured at?Read the answer and worked solution →P pays Rs 300 lakh cash plus an earn-out valued at Rs 40 lakh on the acquisition date. Total consideration?Read the answer and worked solution →An earn-out classified as equity changes in value later. What is done?Read the answer and worked solution →An earn-out liability moves from Rs 40 lakh to Rs 55 lakh as sales targets are hit. The Rs 15 lakh goes to?Read the answer and worked solution →Which earn-out change is not a measurement period adjustment?Read the answer and worked solution →Which standard decides if a financial-instrument earn-out is debt or equity?Read the answer and worked solution →

Worked practice questions

Ind AS 103 requires every business combination in its scope to follow which accounting approach?

  1. Pooling of interests
  2. Acquisition method
  3. Proportionate method
  4. Equity-based method
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Correct answer: B. Acquisition method

Paragraph 4 makes the acquisition method mandatory for every business combination within the scope of the standard.

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The acquisition date under Ind AS 103 is tied to the day the acquirer takes which step?

  1. Signs the term sheet
  2. Gets control of acquiree
  3. Files the merger scheme
  4. Pays the final instalment
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Correct answer: B. Gets control of acquiree

The acquisition date is defined by the moment control passes to the acquirer, not by signing or payment dates.

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Which item is among the four things the acquisition method requires?

  1. Pooling both reserves
  2. Amortising goodwill
  3. Identifying the acquirer
  4. Restating at book value
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Correct answer: C. Identifying the acquirer

Paragraph 5 lists identifying the acquirer, fixing the acquisition date, measuring assets, liabilities and NCI, and measuring goodwill or a bargain gain.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment Property