In recording the acquisition cost of an entire business,

Question

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Goodwill is recorded as the excess of cost over the fair value of identifiable net assets. This means that the cost of acquiring a business is allocated to the assets and liabilities acquired, and any excess cost over the fair value of the identifiable net assets (i.e. the assets and liabilities that can be specifically identified and measured) is recorded as goodwill. Goodwill represents the value of the business beyond its tangible assets and can arise from factors such as the reputation of the business, customer relationships, and intellectual property.

In Recording the Acquisition Cost of an Entire Business