Answer: a gain on the income statement.

When the purchase price is less than the fair value of net identifiable assets acquired, this results in a **bargain purchase gain**. Under both IFRS (IFRS 3) and US GAAP (ASC 805), this gain is recognized immediately in **profit or loss** (income statement). The accounting treatment requires: - First, reassess the identification and measurement of assets, liabilities, and non-controlling interests - If the excess still exists after reassessment, recognize the gain in profit or loss - This is not deferred or recognized in other comprehensive income

Author: LeetQuiz Editorial Team