A negative acquisition differential
A)is always equal to negative goodwill.
B)is equal to negative goodwill when the fair values of the subsidiary's identifiable net assets are equal to their book values.
C)implies that the parent company may have overpaid for its acquisition.
D)cannot occur under the acquisition method)

Question

Quizplus · Accepted Answer

A negative acquisition differential is equal to negative goodwill when the fair values of the subsidiary's identifiable net assets are equal to their book values, as it indicates that the purchase price is less than the fair value of the net assets acquired.

A Negative Acquisition Differential