Question

How is negative goodwill treated under the acquisition method?

Accepted Answer

A)  The acquiring company will report a gain on acquisition. 
B)  The acquiring company will report a loss on acquisition. 
C)  The negative goodwill will be included in other comprehensive income, as it is essentially an unrealized gain. 
D)  The negative goodwill is prorated and allocated to the fair value of the identifiable net assets of the acquired company. 
A)  The acquiring company will report a gain on acquisition. 
B)  The acquiring company will report a loss on acquisition. 
C)  The negative goodwill will be included in other comprehensive income, as it is essentially an unrealized gain. 
D)  The negative goodwill is prorated and allocated to the fair value of the identifiable net assets of the acquired company.

How is negative goodwill treated under the acquisition method?

Conceptual and Case Analysis Frameworks for Financial Reporting

Investments in Equity Securities

Consolidation of Non-Wholly Owned Subsidiaries

Consolidation Subsequent to Acquisition Date

Intercompany Inventory and Land Profits

A Intercompany Profits in Depreciable Assets B Intercompany Bondholdings

Consolidated Cash Flows and Changes in Ownership

Other Consolidation Reporting Issues

Foreign Currency Transactions

Translation and Consolidation of Foreign Operations

Accounting for Not-For-Profit and Public Sector Organizations

Filters

Exam 3: Business Combinations

How is negative goodwill treated under the acquisition method?

Conceptual and Case Analysis Frameworks for Financial Reporting

Investments in Equity Securities

Consolidation of Non-Wholly Owned Subsidiaries

Consolidation Subsequent to Acquisition Date

Intercompany Inventory and Land Profits

A Intercompany Profits in Depreciable Assets B Intercompany Bondholdings

Consolidated Cash Flows and Changes in Ownership

Other Consolidation Reporting Issues

Foreign Currency Transactions

Translation and Consolidation of Foreign Operations

Accounting for Not-For-Profit and Public Sector Organizations

Filters