Question 2

When the investor controls an investee, the investor needs to account for the investee using acquisition method.

The four (4) steps involved in applying acquisition method are:-

(i) Identify acquirer

(ii) Determine the acquisition date

(iii) Recognise and measure the identifiable assets required; the liabilities assumed; and any non-controlling interest; and

(iv) Recognise and measure goodwill or a gain from a bargain purchase.

Required:-

(a) Explain how to identify acquirer. Please support your answer with relevant Malaysian Financial Reporting Standard(s).

(b) Explain how to determine acquisition date and why it is important to determine acquisition date.