In a business combination, a company assigns the cost, where possible, to the identifiable tangible and intangible assets, with the remainder recorded as goodwill.

Question

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This statement is correct. Under the acquisition method of accounting for business combinations, the cost is allocated to the identifiable tangible and intangible assets and liabilities acquired. If the cost exceeds the fair value of the identified assets and liabilities, the excess is recorded as goodwill.

In a Business Combination, a Company Assigns the Cost, Where