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Questions and Answers
What is the primary reason for businesses to combine?
What is the primary reason for businesses to combine?
- To diversify products
- To reduce expenses
- To eliminate competition
- To gain a competitive advantage (correct)
According to PFRS 3, what is the definition of a business combination?
According to PFRS 3, what is the definition of a business combination?
- Any set of conditions in which organizations are joined through any means
- A situation where two or more businesses merge without any control being transferred
- A transaction in which an acquirer gains partial control of a business
- A transaction in which an acquirer takes over a business (correct)
What is the classification of business combination based on the legal point of view?
What is the classification of business combination based on the legal point of view?
- Methods of Combination (correct)
- Structure of Combination
- Accounting Method Used
- None of the above
Which type of business combination involves combining companies within the same industry that have been competitors?
Which type of business combination involves combining companies within the same industry that have been competitors?
Why would a company choose vertical integration as a structure of combination?
Why would a company choose vertical integration as a structure of combination?
What does an acquirer obtain in a business combination according to PFRS 3?
What does an acquirer obtain in a business combination according to PFRS 3?
Which type of business combination involves little to no similarities between the companies involved?
Which type of business combination involves little to no similarities between the companies involved?
In a statutory merger, what happens to the acquired company as a separate legal entity?
In a statutory merger, what happens to the acquired company as a separate legal entity?
What method of business combination involves forming a new company to acquire all the net assets of two or more companies?
What method of business combination involves forming a new company to acquire all the net assets of two or more companies?
In stock acquisition, what happens to the acquired company as a separate legal entity?
In stock acquisition, what happens to the acquired company as a separate legal entity?
Which accounting method is used for all business combinations according to PFRS 3 Revised?
Which accounting method is used for all business combinations according to PFRS 3 Revised?
In business combination, what is recognized and measured at fair value?
In business combination, what is recognized and measured at fair value?
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