Amortization and Impairment of Investments in Associates Quiz
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Questions and Answers

Which of the following statements is true regarding the amortization of the AD?

  • The amortization of the AD reduces the investment account and the investment income from associate (correct)
  • The amortization of the AD increases the investment account and the investment income from associate
  • The AD is not amortized in subsequent periods
  • The AD is fully amortized in the first period

    • What happens to the carrying amount of the investment in the associate if the investment is found to be impaired?

  • It increases
  • It decreases (correct)
  • It remains the same
  • It becomes zero

    • What is a business combination according to IFRS 3 Business Combinations?

  • A transaction where an acquirer obtains control of one or more businesses (correct)
  • A transaction where an acquirer obtains control of one or more liabilities
  • A transaction where an acquirer obtains control of one or more employees
  • A transaction where an acquirer obtains control of one or more assets

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