Goodwill on acquisition is recorded when:
A) the cost of the acquisition of the subsidiary is less than the fair value of the subsidiary's equity.
B) the cost of the acquisition is more than the fair value of the subsidiary's equity.
C) the cost of the acquisition is equal to the fair value of the subsidiary's equity.
D) none of the above.

Question

Quizplus · Accepted Answer

Goodwill on acquisition is recorded when the cost of the acquisition is more than the fair value of the subsidiary's equity. Goodwill represents the premium paid by the acquirer over the value of the net assets acquired.

Goodwill on Acquisition Is Recorded When