Before the combination, Hydre SA held a receivable of 400,000 from Algue SA, which it then acquires. Settlement of this pre-existing relationship in the transaction gives rise to a loss that the case measures at 60,000, reducing the receivable. Case convention: the loss is case data; it is recognised separately from the business combination. Record the entry for the settlement of the pre-existing relationship.
- Settlement loss measured by the case
- 60,000