12 Questions
What is the primary reason for businesses to combine?
To gain a competitive advantage
According to PFRS 3, what is the definition of a business combination?
A transaction in which an acquirer takes over a business
What is the classification of business combination based on the legal point of view?
Methods of Combination
Which type of business combination involves combining companies within the same industry that have been competitors?
Horizontal Integration
Why would a company choose vertical integration as a structure of combination?
To strengthen the supplier-customer relationship
What does an acquirer obtain in a business combination according to PFRS 3?
Complete control of one or more businesses
Which type of business combination involves little to no similarities between the companies involved?
Conglomerate
In a statutory merger, what happens to the acquired company as a separate legal entity?
It ceases to exist
What method of business combination involves forming a new company to acquire all the net assets of two or more companies?
Statutory Consolidation
In stock acquisition, what happens to the acquired company as a separate legal entity?
It becomes a subsidiary
Which accounting method is used for all business combinations according to PFRS 3 Revised?
Purchase Method
In business combination, what is recognized and measured at fair value?
Identifiable Assets & Liabilities
Learn about the concept of organizing in management, including its definition and functions such as task assignment, resource allocation, and work activity coordination to achieve common goals.
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