Question 1. Samuel Co acquires control of Delilah Co and under IFRS 3 must recognise all of the identifiable assets acquired. Which of the following will NOT be recognised separately, but instead will form part of the overall goodwill recognised in the group accounts of Samuel Co?

The Strawberrylicious brand name not previously recognised by Delilah Co

A patent for the process used to produce Strawberrylicious, not previously recognised by Delilah Co

Question 2. In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, in which of the following circumstances should an expense for $450,000 be recognised?

For damages in a lawsuit that the reporting company has a 75% chance of losing. The damages claim is for $600,000

For the expected cost to dismantle an oil platform as required by law. The cost is $700,000, which has a present value of $450,000.

For the $450,000 cost to make good land contaminated as a result of past years' operations. A law requiring the clear up is virtually certain to be enacted.

For the $450,000 cost of fitting fire safety equipment to comply with a law coming into effect in the next financial year.

Internally generated goodwill for the business. This was not previously recognised by Delilah Co

A licensed customer list. Delilah Co had not previously been able to recognise the list as an asset

Question 3. The following material events occurred after the reporting date but before the financial statements were authorised for issue. According to IAS 10 Events after the Reporting Period, which of these would be classed as an adjusting event?

The disposal of a subsidiary

Change of foreign exchange rates

Destruction of inventory in a warehouse fire but not affecting the going concern status

Bankruptcy of a customer with a balance outstanding at the year end