Accounting · IFRS 3 Business Combinations
Sam Group acquired Hill Co on 1 July 20X4. During the fair value exercise, the following intangible items were identified: (1) An internally developed customer relationship database valued at $700,000 (identifiable, separable, and reliably measurable at acquisition); (2) A purchased patent with a fair value of $600,000; (3) An internally generated brand name 'Gordon' valued at $1,200,000; (4) A geographical operating license with a fair value of $250,000. Under IFRS 3, which of these items should be recognized separately from goodwill in the consolidated statement of financial position as at 1 July 20X4?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Patent $600,000, License $250,000, Customer Database $700,000, and the brand name not recognized at all.
- 2Patent $600,000, License $250,000, Customer Database $700,000, and only the brand name included in goodwill.✓
- 3Patent $600,000, License $250,000, Customer Database $700,000, and the brand name included in goodwill.
- 4Patent $500,000, License $200,000, and the remaining values included in goodwill.
Correct answer
Patent $600,000, License $250,000, Customer Database $700,000, and only the brand name included in goodwill.
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