The intangible asset representing the difference between the purchase price paid for a going concern and the fair market value of the purchased company's identifiable net assets is referred to as:
A)a patent
B)goodwill
C)a franchise
D)a leasehold

Question

Quizplus · Accepted Answer

Goodwill is the intangible asset that represents the difference between the purchase price paid for a going concern and the fair market value of the purchased company's identifiable net assets. It arises due to factors such as brand reputation, customer relationships, and employee skills, which result in future economic benefits for the business. Patents, franchises, and leaseholds are different types of intangible assets, but they do not represent the difference between the purchase price and fair market value of an acquired company's net assets.

The Intangible Asset Representing the Difference Between the Purchase Price