To determine the implied fair value of goodwill,the company will compare the fair value of the reporting unit (including goodwill)with ________.
A)the fair value of the net assets of the reporting unit (without goodwill)
B)the fair value of the net assets of the reporting unit (including goodwill)
C)the fair value of the reporting unit (without goodwill)
D)the book value of the reporting unit (without goodwill)

Question

Quizplus · Accepted Answer

To determine the implied fair value of goodwill, the company needs to compare the fair value of the reporting unit (including goodwill) with the fair value of the net assets of the reporting unit (without goodwill). This is because the fair value of the reporting unit (including goodwill) already reflects the value of the net assets, but also includes the value of goodwill. Therefore, by comparing it to the fair value of the net assets without goodwill, the company can isolate the value of goodwill and determine its implied fair value.

To Determine the Implied Fair Value of Goodwill,the Company Will