For all asset acquisitions, acquired goodwill is recognised when the cost of acquisition is:
A)greater than the fair value of the net assets acquired
B)less than the fair value of the net assets acquired
C)greater than the fair value of the net assets acquired and the acquisition is of a business
D)less than the fair value of the net assets acquired and the acquisition is of a business

Question

Quizplus · Accepted Answer

Goodwill is recognised when the cost of acquisition is greater than the fair value of the net assets acquired and the acquisition is of a business. This is because goodwill represents the value of the business as a whole, including any intangible assets that are not separately identified and valued.

For All Asset Acquisitions, Acquired Goodwill Is Recognised When the Cost