On 1 July 2021, YEL Ltd acquired all the issued shares of LOW Ltd. At acquisition date, the identifiable assets and liabilities of LOW Ltd included an unrecognised liability for unsettled dispute with a fair value of $40 000 and an unrecognised asset for research and development (R&D) projects with a fair value of $90 000. Assume the consolidation of YEL Ltd and LOW Ltd is being prepared at the acquisition date of 1 July 2021. What is the business combination valuation entry for unrecognised liability?

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In a business combination the acquiring company needs to recognize and measure the fair value of the ... View the full answer