How should negative goodwill be shown on the consolidated financial statements of the acquirer?
A)As a gain on the statement of comprehensive income
B)As a loss on the statement of comprehensive income
C)As a liability on the statement of financial position
D)As a separate amount under shareholders' equity on the statement of financial position

Question

Quizplus · Accepted Answer

Negative goodwill, often arising when the purchase consideration in a business combination is less than the fair value of the net assets acquired, is recognized as a gain in the acquirer's statement of comprehensive income. This reflects the immediate recognition of profit due to the acquisition being made under favorable conditions.

How Should Negative Goodwill Be Shown on the Consolidated Financial