Goodwill may arise when the purchaser buys another company that has higher than normal earning power.

Name: Goodwill may arise when the purchaser buys another company that has higher than normal earning power.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Goodwill is an intangible asset that arises when a company pays more for an acquisition than the fair value of the assets acquired. This may occur when the purchased company has higher than normal earning power, which could generate future profits for the acquiring company.

Goodwill May Arise When the Purchaser Buys Another Company That