When a subsequent block of an existing subsidiary's stock is purchased,
A) the determination and distribution of excess schedule incorporates the identifiable net asset values from previous acquisitions.
B) the determination and distribution of excess schedule is completely independent of the identifiable net asset values from previous acquisitions.
C) additional goodwill is recognized for any excess of cost over book value
D) none of the above.

Question

Quizplus · Accepted Answer

When a subsequent block of an existing subsidiary's stock is purchased, the determination and distribution of excess schedule incorporates the identifiable net asset values from previous acquisitions. This is because the identifiable net asset values are updated with each subsequent acquisition and included in the determination and distribution of excess schedule. Additionally, any excess of cost over book value results in the recognition of additional goodwill.

When a Subsequent Block of an Existing Subsidiary's Stock Is