Where the consideration transferred is less than the fair value of the identifiable net assets and contingent liabilities acquired, the item must be recognised in the consolidation worksheet as:

Where the consideration transferred is less than the fair value of the identifiable net assets and contingent liabilities acquired, the item must be recognised in the consolidation worksheet as:

A gain from a bargain purchase.

Here are the steps to understand this:

1. Consideration Transferred: This is the total amount paid or the fair value of assets given up to acquire another entity.

2. Fair Value of Identifiable Net Assets and Contingent Liabilities: This refers to the fair value of the assets and liabilities of the acquired entity that can be separately identified and measured at fair value.

3. Bargain Purchase: If the consideration transferred is less than the fair value of the identifiable net assets and contingent liabilities acquired, the difference is known as a bargain purchase. This situation might occur if the seller is forced to sell for financial or legal reasons and cannot negotiate a price that reflects the fair value of the net assets.

4. Recognition in Consolidation Worksheet: In the consolidation worksheet, a bargain purchase is recognised as a gain. This gain increases the equity of the consolidated entity.

Therefore, where the consideration transferred is less than the fair value of the identifiable net assets and contingent liabilities acquired, the item must be recognised in the consolidation worksheet as a gain from a bargain purchase.