Entity X pays £80m for an 80% interest

in Entity Y. The fair value of Entity B's net assets is estimated to be £75m. 

Which of the following statements regarding the acquisition method of accounting for business combinations is/are CORRECT?

(i)            It is applied only when the acquirer purchases 100% of the share capital of the acquiree 

(ii)          It requires calculating goodwill 

(iii)         It is applied at every balance sheet date subsequent to the date of acquisition 

Which of the following statements regarding IFRS consolidated financial statements is/are CORRECT:

(i)  An entity that has equity investments in one or more other entities is required to present consolidated financial statements.

(ii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity.  

Which of the following statements regarding IFRS accounting for goodwill is/are CORRECT?

Rexco plc holds 40% of the voting rights of Burt plc and 12 other investors each hold 5% of the voting rights of Burt plc. A shareholder agreement grants Rexco plc the right to appoint, remove and set the remuneration of management responsible for directing the relevant activities.

According to IFRS 10, Rexco controls Burt.

During the year ending 31 December 20X1, Entity A invested £60,000 in research

activities and £30,000 in development activities. The development costs meet the

IAS 38 criteria for recognition as an intangible asset and Entity A amortises them

on a straight-line basis over 10 years, with zero residual value. 

What is the amount of amortisation charge in Entity A’s income statement

for the year ending 31 December 20X1?

Tech plc invested £500,000 in building a customer database in 20X1. On 1 July of 20X2, Tech plc was acquired by BC plc and the fair value of the customer database at that time was £950,000.

Which statement is correct?

Investments in advertising are not recognised as intangible assets according to

IAS 38.

Astro plc holds the items listed below. Which one(s) should be accounted as

intangible assets (according to IAS 38) in Astro plc’s financial statements?

Indefinite-life intangible assets are not amortised.