Goodwill represents the excess of the cost of an acquired company over the
A) Sum of the fair values assigned to identifiable assets acquired less liabilities assumed
B) Sum of the fair values assigned to tangible assets acquired less liabilities assumed
C) Sum of the fair values assigned to intangible assets acquired less liabilities assumed
D) Book value of an acquired company

Question

Quizplus · Accepted Answer

Goodwill is calculated as the excess of the purchase price of an acquired company over the sum of the fair values of its identifiable assets less the liabilities assumed. It reflects the value of intangible assets such as brand reputation, customer relationships, and intellectual property that are not separately identifiable or separately recognized.

Goodwill Represents the Excess of the Cost of an Acquired