Revaluation of assets to fair value in a business combination will be accounted for:a) in the records of the subsidiary.b) on consolidation.c) either A or B.d) none of the above

Which of the following statements is correct?Group of answer choicesAASB 3 Business Combinations requires that any revaluations of a subsidiary’s assets at acquisition date must be done in the consolidation worksheet.The revaluation of non-current assets in the subsidiary’s records means that the subsidiary has adopted the cost model of accounting for those assets.Revaluations of assets such as goodwill and inventory are not permitted in the accounting records of the subsidiary.Inventory can be revalued to an amount greater than its cost in the records of the subsidiary.

The business combination valuation entries are used to recognise:Group of answer choicesall of the options are correct.the fair value of the liabilities not recorded in the subsidiary's accounts at acquisition date.the fair value of the assets not recorded in the subsidiary's accounts at acquisition date.the fair value adjustments for assets and liabilities that were recorded in the subsidiary's accounts at acquisition date based on carrying amounts different from fair value.

If the carrying amount of an identifiable non-current asset of a subsidiary in a business combination is increased to fair value, on consolidation the group will record: a. A current tax liability. b. A deferred tax asset. c. A gain on bargain purchase. d. None of the above.

Reverse AcquisitionEntity X and Entity Y exchanged equity interests in a business combination. Relevant information follows:Entity X's  has 2,000 issued shares. To effect the business combination, Entity X will issue 2 new shares for each of the 3,000 total outstanding shares of Entity YEntity X's shares have fair value of P100 per share, while Entity Y's shares have fair value of P300 per share.Entity X's net identifiable assets have a fair value of P260,000 as at the acquisition date.Required:A. Identify the accounting acquirer.B. Compute for the Goodwill.

Which of following statements is not correct in relation to the consolidation process?Group of answer choicesTo avoid double counting of the group's equity, the equity of the subsidiary at the acquisition date needs to be eliminated from the records of the subsidiary.Subsequent to the acquisition date, any intragroup transactions within the group needs to be adjusted and eliminated.The fair value adjustments of assets that were not previously recorded by the subsidiary are recognised in the business combination valuation entries.Consolidated financial statements should offset the carrying amount of the parent's investment in the subsidiary.