Bargain Purchase

Definition

A business combination in which the fair value of the identifiable net assets acquired exceeds the consideration transferred, resulting in a gain rather than goodwill. Under IFRS 3 and ASC 805, the acquirer must reassess whether all assets and liabilities have been correctly identified and measured before recognising a bargain purchase gain in profit or loss. Bargain purchases may arise in distressed sales, forced divestitures, or where sellers prioritise speed over price.