The excess of the cost of acquisition of a company over the fair value of its net identifiable assets is known as:
A) surplus.
B) amortisation.
C) goodwill.
D) abatement.

Question

Quizplus · Accepted Answer

This excess amount is known as goodwill, which represents the intangible assets of the company such as reputation, customer loyalty, and brand value, which are not reflected in the balance sheet of the company. Surplus refers to an excess of income over expenses, amortisation refers to the systematic allocation of the cost of an intangible asset, and abatement refers to a reduction in the amount of something, such as a tax or a penalty.

The Excess of the Cost of Acquisition of a Company