CERTYNEX IFRS ACADEMY

In Klaxon SA's purchase price allocation file, the analyst did not recognise the acquiree's trademark, on the ground that it does not appear in the acquiree's balance sheet. What is the error in this reasoning?

The error is to have isolated the trademark: an asset of this kind remains within goodwill, which gathers the items not recorded in the acquired balance sheet at inception.

Identifiable assets that meet the definitions at the acquisition date are recognised separately from goodwill, recorded or not in the acquired balance sheet.

The error is not to have waited for the end of the reporting period to assess whether the trademark meets the definition of an asset in the Conceptual Framework.

The reasoning is correct: items absent from the acquiree's balance sheet are not carried into the purchase price allocation.