CERTYNEX IFRS ACADEMY

In the acquirer's consolidated financial statements, what is the effect of recognising the deferred tax liabilities arising from the fair value adjustments of a business combination?

They increase goodwill (or reduce the bargain purchase gain).

They increase the acquirer's deferred tax expense in the period of acquisition.

They are recognised in the acquirer's other comprehensive income.

They are not recognised, under the initial recognition exception for an asset or a liability.