When the fair market value of the assets acquired in a business purchase exceed the purchase price, negative goodwill (also called badwill) arises. When negative goodwill arises, GAAP requires that it be allocated to
A) an extraordinary gain.
B) all periods benefited on an equitable basis.
C) reduce proportionately the values assigned to noncurrent assets.
D) reduce proportionately the values assigned to both current and noncurrent assets.

Question

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The Answer of When the fair market value of the assets acquired in a business purchase exceed the purchase price, negative goodwill (also called badwill) arises. When negative goodwill arises, GAAP requires that it be allocated to
A) an extraordinary gain.
B) all periods benefited on an equitable basis.
C) reduce proportionately the values assigned to noncurrent assets.
D) reduce proportionately the values assigned to both current and noncurrent assets.

When the Fair Market Value of the Assets Acquired in a Business