Equity Consideration 36,000.

00
Cash consideration 12,800.00
Contingent Consideration 800.00
Consideration Transferred 49,600.00

FV of Net Assets
Cash 2,000.00
Accounts Receivable 8,000.00
Inventory 31,200.00
PPE 49,600.00
Total Assets
Accounts Payable 28,000.00
Bonds Payable 16,800.00
Total Liabilities
FV of Net Assets

Consideration Transferred 49,600.00

FV of Net Assets 46,000.00
Goodwill 3,600.00

BV of Acquirer 314,000.00
FV of Acquiree 90,800.00
Goodwill 3,600.00
Less: Cash Consideration (12,800.00)
Less: Acquisition Costs and
Stock Issuance Costs (14,800.00)
Consolidated Assets 380,800.00

BV of Acquirer 130,000.00
FV of Acquiree 44,800.00
Contingent Consideration 800.00
Consolidated Liabilities 175,600.00

Equity of the Acquirer 184,000.00

Equity Consideration 36,000.00
Less: Stock Issuance costs (6,800.00)
Less: DAC (8,000.00)
Consolidated Equity 205,200.00
Legal Fees for Business combiantion 3,200.00 DAC Expensed
Finder's Fee 2,800.00 DAC Expensed
Indirect Cost 2,000.00 IDAC Expensed
Total Direct Acquisition Costs 8,000.00

Accounting and legal for SEC registration 4,400.00 SIC Deducted from SP
Printing Costs of Stock Certificate 2,400.00 SIC Deducted from SP

90,800.00

44,800.00
46,000.00
Share Capital 114,000.00
Additional Paid-In Capital 19,200.00
Retained Earnings 72,000.00
Consoldiated Equity 205,200.00
Expensed
Expensed
Expensed

Deducted from SP
Deducted from SP
CT
Less; FV of NA
Goodwill/(Gain on BP)
Consideration Transferred
Gain on Acquisition
FV of NA

BV of Assets
BV of Liabilities
BV of Equity
Less: Obselete Merchandise
Add; Fully Depreciate Van
FV of Equity, excluding the adjustment from Machinery and Equipment

FV of NA
FV of Equity, excluding the adjustment from Machinery and Equipment
Difference from BV to FV of Machinery and Equity
BV of Equipment
FV of Equipment

Number 2
Consideration Transferred
Goodwill
FV of Net Assets
FV of Equity, excluding the adjustment from Machinery and Equipment
Difference from BV to FV of Machinery and Equity
BV of Equipment
FV of Equipment
 327,200.00 CT
148,800.00 FV of NA
476,000.00 Gain on Acquisition

998,400.00
569,600.00
428,800.00
(64,000.00)
192,000.00
556,800.00

476,000.00
556,800.00
(80,800.00)
345,600.00
264,800.00

1,037,000.00
402,000.00
635,000.00
556,800.00
78,200.00
516,500.00
594,700.00
Consideration Transferred
Stock Issuance 1,715,000.00
Cash consideration 375,000.00
Contingent Consideration 148,000.00
Total Consideration 2,238,000.00
Goodwill 647,000.00
FV of NA 1,591,000.00
FV of Liability 530,000.00
FV of Assets 2,121,000.00

BV of Acquirer 4,890,000.00
FV of Acquiree 2,121,000.00
Less: Cash Consideration (375,000.00)
Less: Acquisition Related Co (28,000.00)
Goodwill 647,000.00
Total Assets 7,255,000.00

FV of Acquiree 530,000.00
Contingent Consideration 148,000.00
Increase in Liabilites 678,000.00
Cash Consideration 17,450,000.00
Contingent Consideration 468,000.00
Total Consideration 17,918,000.00
Temporary Fair Value Appraisal 12,385,000.00
Temporary Goodwill 5,533,000.00

Net Assets 12,385,000.00

Goodwill 5,533,000.00
Cash 17,450,000.00
Estimated Liability for Cont 468,000.00

Measurement Period August 1,2016

Cash Consideration 17,450,000.00

Contingent Consideration 396,000.00
Total Consideration 17,846,000.00
Temporary Fair Value Appraisal 16,815,000.00
Temporary Goodwill 1,031,000.00 4,502,000.00

Net Asset 4,430,000.00

Contingent Consideration 72,000.00
Goodwill 4,502,000.00

Cash Consideration 17,450,000.00

Contingent Consideration 284,000.00
Total Consideration 17,734,000.00
Temporary Fair Value Appraisal 16,815,000.00
Temporary Goodwill 919,000.00 (112,000.00)

Contingent Consideration 112,000.00

Goodwill 112,000.00

Cash Consideration 17,450,000.00

Contingent Consideration 284,000.00
Total Consideration 17,734,000.00
Final FV Aprraisal 15,875,000.00
Final Goodwill 1,859,000.00 940,000.00
Goodwill 940,000.00
Net Assets 940,000.00

Contingent Consideration 284,000.00

Loss on Conntigent Consideration 731,000.00
Cash 1,015,000.00
Additional Consideration
FV of PHI
NCI
Total Consideration
FV of Net Assets
FV of Assets 920,000.00
FV of Liabilities (280,000.00)
Goodwill

Investment in Equity Securities 190,000.00

Cash

Investment in Subisidiary 765,000.00

Investment in Equity Securities
Gain on Change on remeasurement
Cash

Working Paper Eliminating Entry

Assets 200,000.00
Goodwill 250,000.00
Equity 440,000.00
Investment in Subisidary
NCI
540,000.00
225,000.00
125,000.00
890,000.00

640,000.00
250,000.00

190,000.00

190,000.00
35,000.00
540,000.00

765,000.00
125,000.00
Comsideration Transferred 2,448,000.00
FV of NA 2,785,800.00
(337,800.00)

DAC 174,700.00 Expensed

SIC Deducted from SP 198,400.00
SIC Deducted from SP 144,900.00
DAC 135,000.00 Expensed
DAC 161,000.00 Expensed
DAC 90,400.00 Expensed
IDAC 115,300.00 Expensed
172,000.00 Expensed
848,400.00
C
Equity of Acquiree (BV) 2,437,500.00
Investment in Subisidiary 1,584,375.00 65%
NCI 853,125.00 35%

BV of NA 2,437,500.00
FV adjustments 436,250.00
FV of NA 2,873,750.00

First Entry: 1,584,375.00

Second Entry 468,750.00
Consideration Transferred by 2,053,125.00

CP included in the Consideration Transferred but excluded from compu

Consideration Transferred by 2,053,125.00

Control Premium (68,750.00)
Basis for Implied FV of NCI 1,984,375.00
/ Percentage Ownership by Pa 65%
x NCI Ownership % 35%
NCI 1,068,509.62

Implied FV Parent (65%) NCI(35%) Total

CT 2,053,125.00 1,068,509.62 3,121,634.62
FV of NA 1,867,937.50 1,005,812.50 2,873,750.00
Goodwill 185,187.50 62,697.12 247,884.62

PS Parent (65%) NCI(35%) Total

CT 2,053,125.00 1,005,812.50 3,058,937.50
FV of NA 1,867,937.50 1,005,812.50 2,873,750.00
Goodwill 185,187.50 - 185,187.50

Given Fair Value Parent (65%) NCI(35%) Total

CT 2,053,125.00 1,150,000.00 3,203,125.00
FV of NA 1,867,937.50 1,005,812.50 2,873,750.00
Goodwill 185,187.50 144,187.50 329,375.00
luded from computing the Implied FV of NCI
 Parent purchases 80 % for
150,000. BV of NA of Acquiree
is 69,000 FV of NA of Acquree
Stock Acquisition 90,000.
Investment in Subisidiary xx
Consideration xx

FV adjustment of Net Assets xx

Equity of Acquiree xx
Goodwill xx
Investment in Subisidiary xx
NCI xx
Gain on BP xx

Equity of Acquiree (BV) xx

Investment in Subisidiary xx
NCI xx

FV adjustment of Net Assets xx

Goodwill xx
Investment in Subisidiary xx
NCI xx
Gain on BP xx
FV of Assets
FV of Liabilites
FV of NA

BV of NA
FV adjustments
FV of NA
Implied Fair Value Parent NCI
CT 150,000.00 37,500.00
FV of NA 72,000.00 18,000.00
Goodwill 78,000.00 19,500.00

Books of Acquirer
Investment in Subisidiary 150,000.00
Cash 150,000.00

Working Paper Elimination Entry

Net Assets 21,000.00
Equity 69,000.00
Goodwill 97,500.00
Investment in Subisidiary 150,000.00
NCI 37,500.00

Given Fair Value (FV of NCI =25000) Parent NCI

CT 150,000.00 25,000.00
FV of NA 72,000.00 18,000.00
Goodwill 78,000.00 7,000.00

Books of Acquirer
Investment in Subisidiary 150,000.00
Cash 150,000.00

Working Paper Elimination Entry

Net Assets 21,000.00
Equity 69,000.00
Goodwill 85,000.00
Investment in Subisidiary 150,000.00
NCI 25,000.00
Proportionate Share Parent NCI
CT 150,000.00 18,000.00
FV of NA 72,000.00 18,000.00
Goodwill 78,000.00 -

Books of Acquirer
Investment in Subisidiary 150,000.00
Cash 150,000.00

Working Paper Elimination Entry

Net Assets 21,000.00
Equity 69,000.00
Goodwill 78,000.00
Investment in Subisidiary 150,000.00
NCI 18,000.00
Total
187,500.00
90,000.00
97,500.00

Equity of Acquiree (BV) 69,000.00

Investment in Subisidiary 55,200.00 0.8
NCI 13,800.00 0.2

FV adjustment of Net Assets 21,000.00

Goodwill 97,500.00
Investment in Subisidiary 94,800.00
NCI 23,700.00

Total
175,000.00
90,000.00
85,000.00

Equity of Acquiree (BV) 69,000.00

Investment in Subisidiary 55,200.00
NCI 13,800.00

FV adjustment of Net Assets 21,000.00

Goodwill 85,000.00
 Investment in Subisidiary 94,800.00
NCI 11,200.00
Total
168,000.00
90,000.00
78,000.00

Equity of Acquiree (BV) 69,000.00

Investment in Subisidiary 55,200.00
NCI 13,800.00

FV adjustment of Net Assets 21,000.00

Goodwill 78,000.00
Investment in Subisidiary 94,800.00
NCI 4,200.00
Theories
1. Under IFRS 3, how shall an entity account for each business combination?
a. Applying pooling of interest method
b. Applying equity method
c. Applying acquisition method
d. Applying cost method

2. Under IAS 27, which of the following statements concerning the determination of the acquirer in a business combination is
a. The acquirer in merger is the entity that absorbed the other entity.
b. The acquirers in consolidation are the entities being consolidated. *acquiree
c. The acquirer in acquisition of stocks is the subsidiary corporation. *parent
d. The acquirer is the entity that has significant influence in the other entity. *CONTROL

3. IFRS 3 defines it as the date on which the acquirer obtains control of another entity.
a. Control date
b. Business combination date
c. Acquisition date
d. Consolidation date

4. Under IFRS 3, what is the initial measurement of the identifiable assets and liabilities assumed in a business combination
a. Acquisition date fair value
b. Acquisition date book value
c. Acquisition date present value of cash flows
d. Acquisition date historical cost

5. Under IFRS 3, in a business combination through acquisition of less than 100% of common stocks of the subsidiary, the n
a. fair value Given FV or Implied FV
b. the present ownership instruments' proportionate share in the recognised amounts of the acquiree's identifiable net ass
c. Either A or B
d. Neither A nor B

6. Under IFRS 3, what is the proper treatment of contingent liability assumed in a business combination?
a. It shall be ignored because it is a possible obligation that arises from past events and whose existence will be confirme
b. It shall be disclosed only because it is not probable that an outflow of resources embodying economic benefits will be r
c. It shall be accrued or recognized as of acquisition date if it is a a present obligation that arises from past even
d. None of the above.

7. Under IFRS 3, what is the proper measurement of the consideration transferred in a business combination?
a. Acquisition-date Fair value
b. Acquisition-date Book value
c. Acquisition-date Historical cost
d. Acquisition-date Present value of cash flows

8. Under IFRS 3, what is the treatment to the excess of the aggregate of (1) the consideration transferred measured in acco
a. Goodwill from business combination to be classified as non-current asset not subject to amortization
b. Gain on bargain purchase to be presented as part of profit or loss
c. Loss on bargain purchase to be presented as part of other comprehensive income
 d. Credit to retained earnings

9. Under IFRS 3, what is the treatment to the excess of the fair value of the net of the acquisition-date amounts of the identif
a. Goodwill from business combination to be classified as non-current asset not subject to amortization but subject to ann
b. Gain on bargain purchase to be presented as part of profit or loss
c. Loss on bargain purchase to be presented as part of other comprehensive income
d. Credit to retained earnings

10. Under IFRS 3, what is the proper treatment to acquisition-related costs also known as direct cost of business combinatio
a. Expense as incurred presented as part of profit or loss
b. Expense as incurred presented as part of other comprehensive income
c. Part of consideration transferred in business combination
d. Debited or charged to direct cost of business combination
 in a business combination is correct?

IFRS 3
IAS 27

d in a business combination?

tocks of the subsidiary, the noncontrolling interest in the net assets of the acquiree shall be measured initially at

acquiree's identifiable net assets

se existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the contro
g economic benefits will be required to settle the obligation.
that arises from past events and its fair value can be measured reliably even it is not probable that an outflow of resources embo

combination?

ansferred measured in accordance with this IFRS, which generally requires acquisition-date fair value; (2) the amount of any non-controlling
ct to amortization
CT 1. CT, NCI, Previously held interest
FV of NA
n-date amounts of the identifiable assets acquired and the liabilities assumed over the of the aggregate of (1) the consideration transferred
mortization but subject to annual impairment test

CT
FV of NA

cost of business combination?

nts not wholly within the control of the entity.

n outflow of resources embodying economic benefits will be required to settle the obligation.

e amount of any non-controlling interest in the acquiree measured in accordance with IFRS 3; and (3) in a business combination achieved i
the consideration transferred measured in accordance with this IFRS, which generally requires acquisition-date fair value; (2) the amount o
siness combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree over th
ate fair value; (2) the amount of any non-controlling interest in the acquiree measured in accordance with IFRS 3; and (3) in a business com
interest in the acquiree over the fair value of the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities as
RS 3; and (3) in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in
acquired and the liabilities assumed?
eviously held equity interest in the acquiree?