Bargain Purchase Gain Meaning

Accounting glossary · Understand, connect, apply

A bargain purchase gain can arise when the recognised net identifiable assets acquired exceed the combined amount of consideration, non-controlling interest and any previously held interest measured under IFRS 3.

Example

A buyer pays 650,000 for the whole business and has no previously held interest. Its recognised identifiable net assets total 700,000. After the required reassessment, the gain is 50,000.

Remember the difference

IFRS 3 requires a reassessment of identification and measurement before recognising the gain in profit or loss.

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Prepared with AI assistance. Examples are fictional and simplified for learning.

Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.

Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.

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