When purchasing an entire company, what is the accounting term for the purchase price in excess of identifiable assets?

Question

Quizplus · Accepted Answer

Goodwill is the accounting term for the purchase price in excess of identifiable assets when purchasing an entire company. It represents the value of the company's brand, reputation, customer base, and other intangible assets. Goodwill is recorded on the balance sheet as an intangible asset and is subject to periodic impairment testing. Options B, C, and D are incorrect as they do not represent the accounting term for the purchase price in excess of identifiable assets.

When Purchasing an Entire Company, What Is the Accounting Term