If the fair value of the net assets acquired in a business combination is greater than the purchase price, the difference is called
A) organizational costs.
B) contributed surplus.
C) purchased goodwill.
D) negative goodwill or bargain purchase.

Question

Quizplus · Accepted Answer

If the fair value of the net assets acquired in a business combination is greater than the purchase price, the difference is called negative goodwill or bargain purchase. This arises when the purchase price is less than the fair value of the net assets acquired. Negative goodwill is recognized as a gain in the income statement in the period of the business combination.

If the Fair Value of the Net Assets Acquired in a Business