Under the full goodwill method, a control premium is recognised when:
A) the parent paid less than the fair value for the shares they acquired.
B) the parent paid more than the fair value for the shares they acquired.
C) the consideration transferred by the parent is more than the fair value of the identifiable net assets acquired.
D) the consideration transferred by the parent is less than the fair value of the identifiable net assets acquired.

Question

Quizplus · Accepted Answer

Under the full goodwill method, a control premium is recognised when the parent paid more than the fair value for the shares they acquired. This difference between the purchase price and the fair value of the net assets acquired represents the value of goodwill, including any control premium paid.

Under the Full Goodwill Method, a Control Premium Is Recognised