According to IFRS 3,how should companies account for negative goodwill arising from business combinations?
A)It should be capitalized and amortized over a period of no more than 40 years.
B)It should be treated as a loss on the consolidated income statement.
C)It should be treated as a gain on the consolidated income statement.
D)There is no rule for negative goodwill,because there is no such thing.

Question

Quizplus · Accepted Answer

According to IFRS 3, negative goodwill arises when the fair value of net assets acquired is greater than the cost of the acquisition. The standard requires that negative goodwill should be recognized as a gain on the consolidated income statement in the period of the acquisition. It should not be capitalized or amortized as a liability.

According to IFRS 3,how Should Companies Account for Negative Goodwill