Any negative goodwill arising on the date of acquisition:
A) is prorated among the parent company's identifiable net assets.
B) is recognized as a gain on the date of acquisition.
C) should be amortized over a predetermined period.
D) is recognized as a gain on date of acquisition by both the parent and the non-controlling interest.

Question

Quizplus · Accepted Answer

Negative goodwill arises when the purchase price is less than the fair value of the acquired company's net assets. This is recognized as a gain on the date of acquisition by the parent company. It is not prorated among identifiable net assets or amortized over a predetermined period. It is not recognized by the non-controlling interest.

Any Negative Goodwill Arising on the Date of Acquisition