When a parent company acquires a wholly owned subsidiary for an amount in excess of the book value of the net assets acquired, the excess is always allocated to goodwill.

Name: When a parent company acquires a wholly owned subsidiary for an amount in excess of the book value of the net assets acquired, the excess is always allocated to goodwill.
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Question

Quizplus · Accepted Answer

The excess amount is allocated to goodwill only after adjusting for the fair value of identifiable tangible and intangible assets.

When a Parent Company Acquires a Wholly Owned Subsidiary for an Amount