2. Business combination may be structured in variety of ways for legal, taxation or other reasons and may include the following, except

1. One or more businesses become subsidiaries of an acquirer or the net assets of one or more businesses are legally merged into the acquirer
2. One combining entity transfers its net assets, or its owners transfer their equity interests, to another combining entity or its owners
3. All of the combining entities transfer their net assets, or the owners of those entities transfer their equity interests, to a newly formed entity (sometimes referred to as a roll-up or put-together transaction)
4. A group of former owners of one of the combining entities obtains control of the combined entity
5. None of these

3. Which of the following is not considered a Business Combination?

1. Buying the shares of a company
2. Purchasing the net assets of a company
3. Reverse acquisitions
4. A combination of entities or businesses under common control.

4. Which of the following statement is FALSE?

1. A step acquisition is a business combination in which an investor obtains control over an investee through multiple transactions.
2. If the parent previously held a noncontrolling interest in the acquired firm, the parent remeasures that interest to fair value and recognizes a gain or loss.
3. On disposal of a controlling interest, any residual interest is remeasured to fair value and reflected in any profit or loss on disposal.
4. If after obtaining control, the parent increases its ownership interest in the subsidiary, further remeasurement takes place.