Facts
|
X plc |
$m |
|
Cost of acquisition |
700 |
|
less fair value of net assets |
300 |
|
less restructuring provision |
(70) |
|
Goodwill |
470 |
|
Income statement at year end |
|
|
Profit before amortization |
140 |
|
Amortization of goodwill |
(47) |
|
93 |
|
|
Interest |
(13) |
|
Profit before tax |
80 |
This information relates to the acquisition of X, a public limited company, by Z, a public limited company.
At the date of acquisition, the fair value of the intangible assets and the contingent liabilities of X were $100 million and $30 million respectively. At the date of the preparation of the financial statements, the value of the net assets of X had increased significantly. The intangible assets have a life of 10 years.
Required
How would the acquisition be accounted for under IFRS 3?