CERTYNEX IFRS ACADEMY

To acquire Rocaille SA, Hêtraie SA pays 5,000,000 to the former owners, plus 60,000 to an investment bank for transaction advice and 40,000 of legal fees. How does it treat these 100,000 of costs?

As expenses, separately from the business combination, without including them in the consideration transferred of 5,000,000.

Capitalised as an intangible asset and amortised over the expected useful life of the assets acquired in the combination.

Added to the consideration transferred, which becomes 5,100,000, increasing goodwill by 100,000.

Allocated between goodwill and the identifiable assets acquired, in proportion to their respective fair values.