Entity A acquired Entity B. On the acquisition date, Entity B had an operating lease as a lessee with less than one year remaining on a five-year lease term. Due to significant changes in the market, Entity B is paying more than what you would expect to currently pay for a similar lease. How should Entity A account for assuming this lease? Entity A must recognize a lease liability at the present value of the remaining lease payments and a corresponding right-of-use asset at the same amount as the lease liability, adjusted downwards for the amount by which the lease terms are unfavorable when compared with market terms (i.e., the off market component of the operating lease). The acquirer is not required to recognize any liabilities or assets on its balance sheet for this lease because its lease term ends within 12 months of the acquisition date. Entity A must recognize a lease liability at the present value of the remaining lease payments and a corresponding right-of-use asset at the same amount as the lease liability. It also must recognize a separate liability for the off market component of the operating lease (i.e., the amount by which the lease terms are unfavorable when compared with market terms). Entity A must recognize a lease liability at the present value of the remaining lease payments and a corresponding right-of-use asset at the same amount as the lease liability. It also must recognize the off market component of the operating lease in profit or loss (i.e., the amount by which the lease terms are unfavorable when compared with market terms). The goodwill resulting from the acquisition of Subsidiary Z by Parent A is calculated as 86,000. In addition to the residual amount calculated under the acquisition method, what incremental information is Parent A required to disclose about the amount recognized as goodwill? The portion of goodwill that is deductible for tax purposes and the time period over which tax deductible goodwill will be amortized. A qualitative description of the factors that make up the amount recognized as goodwill (i.e., the synergies expected to be realized from the acquisition), the portion of goodwill that is deductible for tax purposes and the time period over which tax deductible goodwill will be amortized. A qualitative description of the factors that make up the amount recognized as goodwill (i.e., the synergies expected to be realized from the acquisition). A qualitative description of the factors that make up the amount recognized as goodwill (i.e., the synergies expected to be realized from the acquisition) and the portion of goodwill that is deductible for tax purposes. Which of the following statements about restating a prior business combination when an entity adopts IFRS for the first time is inaccurate? For a first-time adopter that elects not to restate a pre-transition date business combination, the requirements of IFRS 1 may result in adjustments to the entity's opening IFRS balance sheet. Goodwill must also be tested for impairment as of the transition date. For a business combination that occurs before to the transition date, IFRS 1 allows a first-time adopter to elect not to restate those prior business combination to comply with IFRS 3. If this exemption is not elected, the entity is required to restate that business combination and all business combinations that occur thereafter. For business combinations that occur on or after the transition date, IFRS 1 requires a first-time adopter to restate those business combinations to comply with IFRS 3. For a first-time adopter that elects not to restate a pre-transition date business combination, the requirements of IFRS 1 prohibit adjustments to the entity's opening IFRS balance sheet. However, goodwill must be tested for impairment as of the transition date.