Goodwill is:
A)the amount paid for the customer lists,patents and other intangibles in excess of book value.
B)never recognized for accounting purposes.
C)the differential between the amount paid and the book value of the net assets acquired)
D)the difference between the total value of the subsidiary and the amounts assigned to identifiable assets and liabilities.

Question

Quizplus · Accepted Answer

Goodwill is the difference between the amount paid for an acquisition and the book value of the net assets acquired. It represents the value of the company's reputation, brand recognition, customer loyalty, and other intangible assets that are not separately identifiable. Goodwill is only recognized for accounting purposes when it is acquired in a business combination. It is tested for impairment annually and may be adjusted if its value decreases. Therefore, option C is the correct choice.

Goodwill Is