Which statement is not correct?
A)Goodwill represents the difference between the purchase price and the fair value of net assets acquired.
B)Fair value is the after-tax amount at which an item could be sold in an arm's length transaction.
C)Economic goodwill differs from accounting goodwill and can be created by branding.
D)Fair value is the amount which could be exchanged in an arm's length transaction.

Question

Quizplus · Accepted Answer

Fair value is the price at which an item could be sold in an arm's length transaction, without considering any taxes that may apply. Therefore, fair value is a pre-tax amount.

Which Statement Is Not Correct