Whereas the goodwill of the subsidiary may be determined by calculating the goodwill acquired by the parent entity and then adding the fair value of the NCI, this process is not applicable for a gain on bargain purchase.

Question

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In a gain on bargain purchase, the purchase price is less than the fair value of the net assets acquired, resulting in no goodwill being recognized. Instead, a gain is recorded in the income statement.

Whereas the Goodwill of the Subsidiary May Be Determined by Calculating