CERTYNEX IFRS ACADEMY

In a business combination file, identifiable net assets exceed the price paid, and the analyst at Frêne SA immediately recognises the excess as a gain, without further work. What is the error?

The gain is recognised in profit or loss for the period whereas it should have been taken directly to equity, like a first consolidation difference.

The comparison ignores the non-controlling interest, which must not enter the comparison with net assets.

The gain is recognised too early: the acquirer must wait for the end of the reporting period to do so.

The gain is recognised without prior reassessment: the identification of assets and liabilities must first be checked, then their measurements reviewed.