In partnerships, goodwill cannot be recorded unless it results from a business combination that does not qualify as a pooling of interests.

Question

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Goodwill can be recorded in partnerships when a new partner is admitted and pays more than the book value of their share of the existing assets, or when the partnership acquires another business, not just in business combinations that do not qualify as a pooling of interests.

In Partnerships, Goodwill Cannot Be Recorded Unless It Results from a Business