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Question
If the purchase price exceeds the net assets taken over, the difference is treated as ___________.
If the purchase price exceeds the net assets taken over, the difference is treated as ___________.
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Solution
The correct option is D Goodwill
Goodwill arises
when a company acquires another entire business. The amount of goodwill is the cost to purchase
the business minus the fair market value of the tangible assets, the intangible
assets that can be identified, and the liabilities obtained in the purchase.
Goodwill arises when a company acquires another entire business. The amount of goodwill is the cost to purchase the business minus the fair market value of the tangible assets, the intangible assets that can be identified, and the liabilities obtained in the purchase.
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