A bargain purchase element exists when both the cost of the acquisition and the current value of the net assets are below the book value of the net assets.

Question

Quizplus · Accepted Answer

A bargain purchase occurs when the acquisition cost is less than the fair value of the net assets acquired, not when both the cost and the current value of the net assets are below the book value.

A Bargain Purchase Element Exists When Both the Cost of the Acquisition