Question 1. What is meant by a 'business combination'?
Question 2. Why is it important to identify an acquirer in a business combination?
Question 3. What is the acquisition date?
Question 4. What recognition criteria are applied to assets and liabilities acquired in a business combination?
Question 5. How can goodwill arise on acquisition and how is it accounted for?
Question 6. How can a gain on bargain purchase arise on acquisition and how is it accounted for?
Question 7. Hikoi Ltd has recently undertaken a negotiations to acquire 70% of shares of Hapu Ltd. At the start of negotiations, Hikoi Ltd owned 30% of the shares of Hapu Ltd. The negotiations began on 1 January 2023 and enough shareholders in Hapu Ltd agreed to the deal by 30 September 2023. The agreement was for shareholders in Hapu Ltd to receive shares in Hikoi Ltd in exchange for their shares in Hapu Ltd. Over the negotiation period, the share price of Hikoi Ltd shares reached a low of $5.40 and a high of $6.20. The accountant for Hikoi Ltd, Mr Taumata, knows that AASB 3/IFRS 3 must be applied in accounting for the business combination. However, he is confused as to how to account for the original