Goodwill arises when one company acquires another company for a price in excess of the fair market value of the net identifiable assets acquired.

Question

Quizplus · Accepted Answer

Goodwill is the difference between the purchase price and the fair market value of net identifiable assets acquired in a business combination. Therefore, it is true that goodwill arises when one company acquires another company for a price in excess of the fair market value of the net identifiable assets acquired.

Goodwill Arises When One Company Acquires Another Company for a Price