When the implied value exceeds the aggregate fair values of identifiable net assets, the residual difference is accounted for as:
A) excess of implied over fair value.
B) a deferred credit.
C) difference between implied and fair value.
D) goodwill.

Question

Quizplus · Accepted Answer

When the implied value of a company exceeds the aggregate fair values of its identifiable net assets, the residual difference is accounted for as goodwill. This represents the intangible value of a company's brand, customer relationships, employee relations, and other factors not directly measurable.

When the Implied Value Exceeds the Aggregate Fair Values of Identifiable