In a business combination, the only goodwill components suitable for recognition in financial statements are component 4, synergies, and component 5, over-valuation of the consideration.

Question

Quizplus · Accepted Answer

There are actually five components of goodwill that can be recognized in financial statements, including:
1. Recognizable intangible assets
2. Future economic benefits from unidentifiable intangible assets
3. Going concern value or ongoing business value
4. Synergies
5. Over-valuation of the consideration.

In a Business Combination, the Only Goodwill Components Suitable for Recognition